The first country to issue tokenized debt on the Bitcoin-based Liquid network will be El Salvador.
In an announcement made by President Nayib Bukele in conjunction with Blockstream’s Samson Mow, the product will be innovative in the global financial market.
This is just another news from El Salvador on its way to mass adoption of Bitcoin, after announcing that it will build a city for digital currency, completely tax-free for its residents.
Until the beginning of December, El Salvador hosts a series of events about the currency made national, the last week being called “Bitcoin Week”, with events such as Adopting Bitcoin and La Bitconf, the latter being the largest in Latin America that was hosted by the first time in the country.
El Salvador to issue $1 billion in tokenized Bitcoin-based bonds
El Salvador is set to become the first in the world to issue debt to investors worldwide via tokenized and Bitcoin-based bonds, using the Liquid network.
The announcement was made by Samson Mow on the page of Blockstream, who stated that this tool has been under study since the company discovered that the Bitcoin Law would be passed in the Latin country.
“We’ve been talking to El Salvador for months and we’ve been working hard to design and model the titles. This bond offering is something that we believe is attractive to a wide range of investors, from cryptocurrency investors, yield investors, HODLers and ordinary people. We believe this title has the potential to accelerate hyperbitcoinization and create a new financial system based on Bitcoin.”
Thus, a US$ 1 billion “Bitcoin Bond” will be issued in Liquid, which will be divided into two equal parts of US$ 500 million. With half of the value El Salvador will leave in Bitcoin, the other half being in infrastructure investments for mining and energy for this activity.
El Salvador will count on the help of Bitfinex brokerage
Another part of that deal involves broker Bitfinex, which is expected to participate in the creation of a government bonds law and process these issues. Blockstream expects more debt securities to be issued by Liquid, such as mining bonds, among others.
“The future of financial products belongs to Bitcoin, and Bitcoin Bond is the first step towards achieving global inclusion for finance; much like the way Bitcoin created global inclusion for the money.”
Investors in bonds issued by El Salvador will receive dividends directly in their accounts, easily managed by Blockstream AMP, a tool that will be used by the process.
This initiative is the first by a country to tokenize its debt in Bitcoin to build an infrastructure for the digital currency itself, showing the emergence of new financial tools in the global financial sector.