Bukele highlighted that he established at least 52 legal reforms that generated tax incentives to convert El Salvador into one of the nations with the most freedom.
The president of El Salvador, Nayib Bukele, continues his quest to raise the interest of investors and attract them to his nation. The president decided to apply a series of legal changes to offer citizenship to those investors outside the country that might show interest in the Central American country.
A similar strategy got applied to crypto investors by offering them permanent residence in their country. But this time is not just an informal invitation, but there will be a legal bill to apply this policy if it passes the approval test. The Salvadoran leader is giving residence and citizenship to the country.
Bukele has become a popular figure for Bitcoin adoption, and he also got surrounded by a controversial halo in international politics for the same reasons. Recently, a bipartisan group of senators in the United States of America applied a new bill with the sole intention to avoid the risks El Salvador’s adoption of BTC as legal tender poses for the world economy.
On the other hand, El Salvador got ready to release at least $1 billion volcanic-based Bitcoin bonds in March. The funds that come from the bonds would serve to build the world’s first Bitcoin city.
What are the Bitcoin Bonds, and What do they Represent for the Project?
One of the most concerning factors that a project like Bitcoin City has is funding. Cities worldwide support their financial structure through various taxation procedures, including property tax and different rates along with fiat-b state debt.
Nayib Bukele highlighted that he expects to boost the city finances with the surplus income that the cryptocurrency could produce, especially when it comes to a currency like Bitcoin.
El Salvador will also provide $1 billion in tokenized 10-year bonds in Liquid Network through entities like Blockstream, which will give at least 6.5% annual interest. After five years, this bond would provide a dividend when half the total capital gets sold. It is a crowdlending model mainly backed by BTC’s constant growth expectations.
This strategy still needs approval from international, financial, or monetary entities, and it has only set a reduction on the execution of the traditional Salvadorian bonds. The IMF warned about many risks of adopting the BTC as a currency; This adoption could disintegrate a country’s financial stability.
The IMF also spoke about a high risk of contagion that relies on a particular concern given the correlations with the stock market.
By: Jenson Nuñez
