El Salvador’s Finance Minister, Alejandro Zelaya, informed that the country will proceed to issue the first Bitcoin-backed bonds between March 15 and 20.
El Salvador’s authorities informed that the bond will be for a total of USD $1 billion, of which USD $500 will be used to finance Bitcoin mining plans with volcanic energy, and the other USD $500 will be used to acquire more BTC in the main markets.
El Salvador’s Minister of Finance, Alejandro Zelaya, informed the news during an interview on the program “Frente a Frente”, where the official also indicated that the issuance of these bonds is part of El Salvador’s plans to link bitcoin to the country’s economic and financial programs.
The bonds will be identified as “El Salvador Bitcoin Bond 1 (EBB1)” and will have a nominal interest rate of 6.5% for a term of 10 years.
A total equivalent of USD $1 billion will be issued, of which about USD $500 will be used for cryptocurrency operations based on volcanic energy, and the other USD $500 will be invested to acquire more BTC in the main markets.
In addition to these details, Zelaya also indicated that this type of bond will work just as a normal sovereign bond operates, with the difference that it can be paid in Bitcoin and will be much more accessible for those who wish to invest.
In this regard, he highlighted that the minimum participation will be USD $100 and payments can be processed directly through the Liquid network, managed by the Blockstream team.
In this regard, the minister also indicated that this will provide greater access to financing sources, both for resident and foreign investors.
According to Zelaya, the EEB1 “gives greater access to sources of financing”, with respect to the traditional debt market in which the country currently has a negative rating due to the low confidence investors have in the country’s finances.
There are also plans to issue an additional USD $500 million, provided that demand is high and exceeds expectations, according to local media El Salvador.com.