El Salvador’s Digital Currency Vision: BTC Bonds and BTC Cities

Source: Blockchain Knights

With El Salvador heading towards national elections on Sunday, Vice President Felix Ulloa, in an exclusive interview with Reuters, outlined the government’s strong commitment to BTC, especially This comes against the backdrop of President Nayib Bukele's possible re-election.

Vice President Ulloa is currently on leave, running for re-election with President Bukele. He confirmed that BTC’s legal tender status 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), in which the IMF recommended that El Salvador “reconsider” the adoption of BTC.

Ulloa stated that The El Salvador government is firmly opposed to changing its decision on BTC, especially in light of the recent SEC (U.S. Securities and Exchange Commission) approval of a spot BTC ETF listed in the United States.

The vice president also said: "BTC will be protected by law as a legal currency. Moreover, it enjoys the greatest credibility in the world."

If President Bukele and his new ideas Should the party win the upcoming election, as polls widely predict, the El Salvadoran government intends to launch a BTC-backed bond, commonly known as a “volcano bond,” in the first quarter of 2024.

The bonds are part of a broader effort to use BTC to promote the country’s economic development and are closely tied to the proposed BTC City project, which includes BTC mining using volcanic geothermal energy .

President Bukele’s proposal to build a tax-free crypto asset hub, BTC City, in eastern El Salvador remains a key part of the government’s plans.

In addition, the government aims to issue passports to BTC investors who contribute the equivalent of $1 million, a move aimed at attracting large BTC investments into the country.

In September 2021, El Salvador made history and became the first country to designate BTC as a legal currency. This decision caused strong criticism from the international community, especially from the IMF.

However, Ulloa, a 72-year-old lawyer and Vice President, remains hopeful that the country will overcome related challenges and obtain IMF financing, especially considering that "most elements of the package have been agreed."

This firm attitude towards incorporating BTC into El Salvador’s financial system marks the beginning of an important chapter for digital currency in the national economy and the global context.

The results of the upcoming election will be critical in determining the future trajectory of these groundbreaking initiatives.