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El Salvador Unveils Bitcoin Bond Issuance This March

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El Salvador continues to keep the attention of the crypto community with its overly enthusiastic president to government policies and actions promoting digital assets in their entirety. The country has been hyping up its Bitcoin bond offerings for quite a while now and it looks like all those talks could finally reach their fruition. 

El Salvador Unveils BTC Bond Offerings

Spectacular news for the crypto community as El Salvador has finally set a schedule to unveil its extremely hype-up BTC (Bitcoin) bond offerings. Citizens of the country can expect it to come as early as March next month. Additionally, this could also provide opportunities for micro-industries and SMEs (Small and medium-sized enterprises) to boost their business and fund potential projects. 

El Salvador Bitcoin Loans

The latest development was brought to us by none other than Monica Taher, an ally of President Nayib Bukele and also the head of Technological and Economic International Affairs for the national Trade and Investments Secretariat.

Taher announced on Twitter that:

“The first [bond] issue is expected to come out between March 15 and March 20. They will be [issued] through the [Bitcoin] Lightning Network – whereby anyone who wants to invest USD 100 can do so without needing to hire a broker.”

She also clarified that the $100 in her comment refers to the initial value of the first bond issued on March 15 and March 20. 

A report from The Diario El Salvador captured that Alejandro Zelaya, the finance minister of the country stated that Bitcoin bonds provide a big advantage for everyone. By accepting payments in cryptocurrency it is much easier to provide capital markets to small and medium-sized businesses. This leverages the cash flows and boosts the economy of the nation. 

Zelaya further stated that this would offer more worth to multiple parties since access to these funds is democratized.

President Bukele and his administration confidently state that the issuance of these bonds shall be used to raise 1 billion USD as well as fund the construction of a tax-haven location for foreign crypto advocates. 

Not everyone agrees with the administration though as some observers state that foreign governments might use their power to block their citizens from accessing the loans in the first place. Although, if the payments are accepted by platforms like the Lightning Network, then it might be harder for them to do so. 

A good example would be from a Twitter user who voiced his concern:

“I think that US residents will be prohibited from buying the product at the initial offering, but it’ll probably be easy for US residents to buy it in the “secondary market”.

John Smith (@arbitrage789)

Aside from this, El Salvador.com has reported that Taher states that the Salvadoran government is working on a solution to provide low-interest loans for SMEs. These small Bitcoin loans will help these businesses access digital assets and boost their project. Doing so will help strengthen and enhance the economy of El Salvador. 

Conclusion

El Salvador does it again as it captures the eyes of the cryptocurrency community. Hopefully, this new bond issuance system can help set their country’s economy right on track. It won’t just benefit the citizens of El Salvador but foreign clients as well since it can set a precedent that this type of system can work.

We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.

ABOUT THE AUTHOR

Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.

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