El Salvador passes bitcoin-backed bonds, digital assets law

El Salvador has passed the Digital Assets Issuance Law, which provides a legal framework for creating Bitcoin-backed bonds and establishing a government body regulating all digital assets.

The Digital Assets Issuance Law was passed on January 11, with 62 votes in favor and 16 against, and will come into force after official ratification from Nayib Bukele, El Salvador’s president:

With this law, El Salvador will create a “Volcano Bond,” or bitcoin-backed bonds, that the country can use to pay sovereign debt and fund the construction of Bitcoin City.

Bitcoin Office, a recently created government body regulating all El Salvador’s bitcoin-related projects, commented on the future after the passing of the legal framework:

El Salvador is the epicenter of Bitcoin adoption, and thus, economic freedom, financial sovereignty, censorship resistance & unconfiscatable wealth. When we issue the first of the volcano bonds, we will once again be blazing the path forward for this new monetary revolution.

Related: El Salvador makes National Bitcoin Office

The technology provider behind Volcano Bond and Volcano Tokens is Bitfinex, and they say that with Volcano Tokens, El Salvador will be able to raise funds that can then be used to pay government debt and create bitcoin mining infrastructure:

El Salvador’s Volcano Token is targeted to raise $1 Billion and would be backed by the proceeds generated from its geothermal Bitcoin mining operation, which harnesses energy from the nation’s active volcanoes. By leveraging the nation’s natural resources and geothermal energy, El Salvador’s Bitcoin mining industry would utilise only renewable energy to create new Bitcoin, making investment in the bond very attractive to both traditional and ESG investors.

As a reminder, Bitcoin City is planned to be constructed near the Conchagua volcano, and the mining facility is aimed to be powered by hydrothermal energy.

According to Bitfinex, El Salvador also plans to establish a special economic zone for Bitcoin City:

Bitcoin City would offer tax advantages, friendly regulations, create mining infrastructure, and incentivise Bitcoin businesses and entrepreneurs to open offices and startups within the nation. 

The legislation passed in El Salvador allows for the issuance of bonds backed by bitcoin and establishes a comprehensive legal framework for all digital assets. Additionally, the bill creates a regulatory agency responsible for enforcing securities laws and protecting against any malicious activity in the digital asset space:


  • Man who simply bought some BTC for domestic needs in 2014 and then forgot about it till 2017. The dude who got Ethereum in 2017 by misclick and sold it in 2018 "just to try". Lost 1 Florida house in XEM in 2018, Sviatoslav finally decided to trade reasonably and now he is one of the most analytical and data-driven trader in Crypto Industry. Has Bachelor Degree of Chinese Interpreter and deep practical experience in competitive niches SEO.

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