The bill seeks to bring a set of guidelines for all virtual assets in the country.
After becoming the first country to use Bitcoin as legal tender back in 2021, now El Salvador has made history again by passing something called a “Digital Asset Issuance” legislation. This lays down the legal guidelines for a Bitcoin-backed bond, also called the Volcano Bond. This will reportedly be used to resolve sovereign debt, create better infrastructure for Bitcoin mining, and also back up the construction of the ‘Bitcoin City’.
The ‘Volcano’ Bond is named so due to the location of El Salvador’s aforementioned Bitcoin City. This city is all set to become a crypto mining hub that uses hydrothermal energy from the Conchagua volcano located nearby. The advent of the Bitcoin City would offer tax benefits and crypto-friendly regulatory measures, and essentially incentivize citizens to take part in Bitcoin mining and trading.
The bill passed on January 11, Wednesday, as announced by The National Bitcoin Office of El Salvador on Twitter. 62 votes have been recorded in favor of this bill, while 16 were recorded against it. The bill would be acknowledged as law once approved by President Bukele.
The Twitter thread further stated that they would start issuing the bonds in question soon enough.