“Maintain Bitcoin policy”
El Salvador’s Vice President Felix Ulloa said on January 31 that the cryptocurrency Bitcoin (BTC) will remain the country’s legal tender during President Nayib Bukele’s second term. Reuters reported.
Presidential elections will be held in El Salvador on the 4th, and it is certain that incumbent President Bukele will be re-elected.
Ulloa’s remarks followed a recommendation from the International Monetary Fund (IMF). The IMF had asked El Salvador to “review” its Bitcoin legalization policy during negotiations for a multibillion-dollar loan. Mr. Ulloa has said that he does not intend to comply with this policy.
The IMF has repeatedly pointed out the risks of Bitcoin policy since 2021, when the Bitcoin Bill was enacted.
connection: International Monetary Fund (IMF) research report “El Salvador should reconsider the introduction of Bitcoin bonds”
Ulloa said the U.S. Securities and Exchange Commission’s (SEC) approval of a Bitcoin spot ETF also strengthened the Salvadoran government’s determination to advance its Bitcoin policy.
What is Bitcoin ETF?
An Exchange Traded Fund that includes Bitcoin as an investment. An investment trust is a financial product that collects money from investors into a single fund and invests it in stocks, bonds, etc. The system is such that the investment results are distributed according to each investor’s investment amount. Among investment trusts, ETFs are listed on stock exchanges, so they can be bought and sold like stocks.
▶️Virtual currency glossary
Learn about Bitcoin ETFs from the beginning: Explaining the advantages and disadvantages of investing and how to buy US stocks
Bitcoin-backed bonds “Volcano Bonds”
Mr. Ulloa plans to issue Bitcoin-backed bonds in the first quarter of 2024 (January to March) and to proceed with the construction of a “Bitcoin City” if President Bukele is re-elected as expected. He said he would go.
Last December, El Salvador’s Bitcoin-backed bonds, known as Volcano Bonds, were approved by the country’s Digital Assets Commission (CNAD).
According to the plan as of January last year, this bond would be issued with approximately 146 billion yen ($1 billion) worth of Bitcoin as collateral. The term is 10 years and is expected to provide investors with an annual yield of 6.5%.
The funds raised through the Volcano Bonds will be used to build Bitcoin City and purchase Bitcoin.
connection: El Salvador’s Bitcoin-backed bond “Volcano Bond” receives regulatory approval
Cryptocurrency special zones and citizenship programs
Bitcoin City is a special cryptocurrency zone that President Bukele is promoting to build in eastern El Salvador. We will attract virtual currency companies by exempting them from income taxes other than value added tax (VAT) and fixed asset taxes.
President Bukele has said that in 2022, the zone will be powered entirely by volcanic geothermal power.
connection: El Salvador’s “Bitcoin City” concept to utilize 100% volcanic heat
Last December, El Salvador also launched a citizenship program that offers a residency visa and a path to citizenship to foreigners who donate $1 million in Bitcoin or the stablecoin USDT.
connection: El Salvador’s new immigration law moves into an era of obtaining citizenship with Bitcoin – Report