(Bloomberg) -- El Salvador’s presidency dispatched a digital-securities bill to lawmakers, taking the nation a step closer to raising $1 billion via the world’s first sovereign blockchain bond.
A spokesperson for the presidency late Tuesday released a copy of the 33-page legislation, which calls for a digital-assets commission and a Bitcoin Fund Management Agency to oversee crypto-related debt sales.
The text says the goal is to “create a legal framework to transfer digital assets that are used in public issuances in El Salvador, as well as regulate the requirements and obligations of issuers and providers of digital assets.”
The proposed blockchain bonds, with a minimum investment of just $100, are meant to help finance the construction of a tax-free, coastal Bitcoin City that would have geothermal energy from a nearby volcano for mining digital coins.
The bonds would raise $500 million for infrastructure in Bitcoin City and another $500 million to buy Bitcoin, with any appreciation in the digital currency ultimately shared with bondholders.
El Salvador last year became the first country to make Bitcoin legal tender. President Nayib Bukele, a champion of cryptocurrencies, has been trying to hawk Bitcoin-backed bonds to international investors but with little success.
The controversial initiative is stoking worries worries about the nation’s creditworthiness amid stalled talks with the International Monetary Fund on financing to help plug a budget gap.
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