Per a disclosure by President Nayib Bukele, El Salvador proposes to build the first-ever “Bitcoin City” in the Central America through a $1 billion tokenized Bitcoin-based bond.
The Blockstream would fund the $1 billion Bitcoin-based bond and iFnex would act as the funds processor.
The First half of the fund would go into the construction and purchases of Bictoin mining equipment for the Bitcoin city and it will attract a coupon rate of 6.5%. However, the remaining $500 million would be used for buying additional Bitcoin into the country’s wallet.
The additional Bitcoin proposed to buy with the remaining half a billon dollar would be locked for a five-year period and when the lockup period ends, El Salvador would be able to sell its assets to pay dividends to holders.
However, Samson Mow has indicated that the APY would have reached 146% by the next one decade if the price of Bitcoin hits the $1 million per unit as predicted. Equally, the market cap may have surpassed $20 trillion or double that of gold.
Mow assumed if other countries had followed in the steps of El Salvador, it would have been at the advantage of the $500 million bond proposed to use for Bitcoin purchases. Per recent announcement, the country’s Bitcoin holding stands around 8,500 units, representing a fraction of the total Bitcoins on exchanges.
He also added that El Salvador will become “the Singapore of Latin America” and one of the notable financial centers of the world.
Reports had it that the Central American country is even working formulate a new securities law to back its tokenized bond issuance. Per a release, iFinex Securities will process the bonds, which could be purchased using BTC, USD, and USDT (Tether).
It is worth adding that Bitfinex is facing fine by the New York Attorney General over irregularities in its Tether reserves report. Tether is equally facing probe over bank fraud.