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The chief technology officer of Bitfinex crypto exchange has claimed that El Salvador’s long-awaited Bitcoin (BTC) bond will be launched “around June to September” this year. But ties may not be ties after all, he explained. Alternatively, the issuance could take the form of digital securities.
speak in Paris Blockchain WeekBitfinex CTO Paolo Ardoino explained that El Salvador has already finished work on a law allowing the issuance of digital securities.
cryptonosias reported that the law has now passed parliament, but said the country was also working to create an organization “to regulate such assets”, noting that this was the last necessary step before its issuance. suggests.
However, Bitfinex’s CTO has suggested that the offering may not come in the form of bonds. Instead, El Salvador may decide to release ‘stocks’ or ‘digital securities’.
“When the idea of issuing Bitcoin bonds was put forward, interest rates on US Treasuries were much lower. And this product, bonds, would have generated a 7% annual return.”
However, the CTO added that it would be “difficult to market these 7% bonds as a commodity” as interest rates “are currently at 4.5%”.
He argued that “investor preference” is to see bonds issued “as shares.”
“The feedback we have gotten from potential investors is that they want it to be more like a digital stock of an energy company operating in El Salvador. [BTC] mining company. ”
BTC Bonds in El Salvador – What is Bitfinex’s role?
The bond (or stock) is now available on the Bitfinex trading platform and the company is working on projects with the Central American country.
El Salvador’s BTC-enthusiastic President Nayib Bukele has given Bitcoin legal tender status in September 2021. The bond project was announced shortly after.
Congress has introduced a bill to allow states to issue BTC bonds. However, the government has repeatedly postponed the launch as the market contracted during the crypto winter.
The offering is called “Volcano Bonds” and is named in honor of the country’s many volcanoes and the ambitious Bitcoin City project.
Bukele has said it intends to use the proceeds from the bond sale to create a tax-free haven for international bitcoiners. A city is built at the foot of a volcano, and a geothermal power plant atop it mines Bitcoin.
Bukele and Bitfinex say they hope to raise around $1 billion with the offering.