El Salvador Makes Historic Step in Cryptocurrency Adoption by Approving Bitcoin-Backed Bond

El Salvador has taken a historic step in the adoption of cryptocurrencies by approving legislation that establishes a legal framework for a Bitcoin-backed bond called "Volcano Bond". The digital assets bill in the Legislative Assembly received 62 votes in favor and 16 against.

The Bitcoin-backed bond called 'Volcano Bond' will be used to pay sovereign debt, finance the construction of Bitcoin City and create a Bitcoin mining infrastructure. The government plans to use these bonds to pay its sovereign debt, finance the construction of a Bitcoin city and create Bitcoin mining infrastructure. The bonds will be denominated in US dollars and pay an annual 6.5% for ten years with a five-year lock-up period, with quick access for the country's citizens.

President Nayib Bukele has been a vocal advocate for Bitcoin since announcing in September 2021 that he would make Bitcoin legal tender in the country. Despite opposition from many of his citizens, Bukele has committed to buying one Bitcoin per day, which will be added to the country's stash of around 2,300 BTC.

The measure in El Salvador comes at a time when the country is facing financial problems and defaulting on debt payments. Despite financial challenges, El Salvador has taken a bold step at a time when the entire crypto industry is in crisis. It is likely that the country will quickly move forward with its bond issuance to finance $667 million in bonds that mature after a loan from the IMF was rejected.

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