El Salvador's Digital Currency Vision: BTC Bonds and BTC City
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El Salvador's Digital Currency Vision: BTC Bonds and BTC City
Salvadoran Vice President Felix Ulloa confirmed that BTC's status as legal tender in El Salvador will remain unchanged.
Navigating Web3 tides with focused insightsSource: Bitcoinist
Compiled by: Blockchain Knight
As El Salvador prepares for national elections this Sunday, Vice President Felix Ulloa outlined the government's firm commitment to BTC in an exclusive interview with Reuters, particularly against the backdrop of President Nayib Bukele’s potential re-election.
Currently on leave and campaigning alongside President Bukele for re-election, Vice President Ulloa confirmed that BTC’s status as legal tender in El Salvador will remain unchanged.
This statement comes as El Salvador is negotiating a $1.3 billion loan with the IMF (International Monetary Fund), which has advised the country to “reconsider” its adoption of BTC during talks.
Ulloa stated that the Salvadoran government remains firmly opposed to altering its decision on BTC, especially in light of the SEC’s recent approval of spot BTC ETFs listed in the United States.
The vice president added: "BTC’s status as legal tender will be upheld by law. Moreover, it is gaining the greatest credibility worldwide."
If President Bukele and his Nuevas Ideas party win the upcoming election—as widely predicted by opinion polls—the government plans to launch BTC-backed bonds, commonly known as “volcano bonds,” in the first quarter of 2024.
These bonds are part of a broader effort to leverage BTC for national economic development, closely tied to the proposed BTC City project, which includes using geothermal energy from volcanoes for BTC mining.
President Bukele’s proposal to build a tax-free crypto asset hub—BTC City—in eastern El Salvador remains a key component of the government’s agenda.
In addition, the government aims to issue passports to investors who contribute BTC equivalent to $1 million, a move designed to attract substantial BTC investment into the country.
In September 2021, El Salvador made history by becoming the first country to adopt BTC as legal tender—a decision that drew strong international criticism, particularly from the IMF.
Nevertheless, Ulloa, a 72-year-old lawyer and vice president, remains hopeful that the country will overcome related challenges and secure IMF financing, especially given that "most of the package has already been agreed upon."
This resolute stance on integrating BTC into El Salvador’s financial system marks a significant chapter for digital currencies within national economies and on the global stage.
The outcome of the upcoming election will be crucial in determining the future trajectory of these pioneering initiatives.
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