El Salvador plans to issue the world’s first sovereign $1 billion US dollar denominated 10-year Bitcoin bonds on the Liquid Network, Bloomberg reported citing the chief strategy officer of Blockstream.
The so-called “volcano bond” is to be equally split between an allocation in bitcoin and Bitcoin mining infrastructure powered by geothermal energy in the region, Samson Mon explained.
As demonstrated by Blockstream models, at the end of the 10th year of the bond, the annual percentage yield will be 146 percent due to Bitcoin’s projected appreciation, with Bitcoin expected to hit the $1 million mark within five years.
The Latin American country also aims to build Bitcoin City near the Conchagua volcano, to provide energy for mining, Bloomberg reported citing president Nayib Bukele.
The city will be free of income, property and capital gains taxes, with only 10 percent of value-added tax to fund city construction and services.
The ambitious plans will allow El Salvador to be “the financial center of the world” and “the Singapore of Latin America,” Mow said.
