El Salvador’s Bitcoin Backed-bonds or also known as the Volcano Bonds is now one step closer in becoming a Law. Winning by 62 votes, the Legislative Assembly of El Salvador passed the bill on January 11. Once the President signs the bill, it would officially become law and allow El Salvador to raise funds to pay the sovereign debt and build a fund for its Bitcoin City. 

The bill was supposed to be released in March 2022 but due to the crypto winter, the bill was filed in November 2022. 

El Salvador’s Bitcoin City aims to develop a hub for renewable cryptocurrency mining using hydrothermal energy from the active volcanoes in El Salvador. According to the Central American nation, Bitcoin City was aiming to raise $1 billion worth of Bitcoin-backed bonds wherein half of the funds will be invested in Bitcoin and the other half will be used in building the necessary needs for the Bitcoin industry. Moreover, the Volcano Bonds will pay a 6.5% yield and allow fast-tracked citizenship for investors. 

In addition, the Bitcoin City serves as a special economic zone that provides tax benefits, incentives, and crypto-friendly rules to residents to start their Bitcoin businesses. 

Meanwhile, the National Bitcoin Office (ONBTC) supports the evaluation and development of upcoming projects related to Bitcoin for the country’s economic development. The ONBTC was formed in November 2022 along with the bill. Furthermore, El Salvador’s Volcano Token will be provided by Bitfinex, a cryptocurrency exchange that supports BTC.