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Bitfinex Securities Launches El Salvador's First Tokenized Debt for Hilton Hotel Development

The first licenced supplier of digital assets in El Salvador, Bitfinex Securities, is spearheading the nation’s first tokenized asset raising using the layer 2 Liquid Network of Bitcoin. Bitfinex Securities intends to use a tokenized debt offering in partnership with Inversiones Laguardia S.A. de C.V. to finance the construction of a new Hilton hotel complex at El Salvador International Airport.

Liquid Network’s Tokenized Debt OfferingOn the Liquid Network, a bitcoin sidechain that facilitates quicker and more scalable transactions, the tokenized debt offering, or HILSV, will be launched. HILSV will be traded in relation to the US currency and tether (USDT), giving investors a chance to contribute to the hotel project’s fundraising.El Salvador International Airport’s Hilton Hotel ComplexThe construction of a Hampton by Hilton hotel complex at El Salvador International Airport will be funded by the money collected via the tokenized debt issuance. The building proposal will include restaurants, shops, a swimming pool, and 80 rooms spread across 4,484 square metres on five stories. Hilton Hotels is participating as a franchisor, although it is not associated with or responsible for the product.Advantages for El Salvador’s Development of the Capital MarketThis innovative programme marks a critical turning point in the growth of El Salvador’s capital market. Bitfinex Securities and Inversiones Laguardia are bringing a new asset class to the market by using tokenization and blockchain technology. In addition to giving issuers in areas with restricted access to capital a new source of funding, the tokenized debt offering enables participation from investors who may not otherwise have access to such assets.Job Creation and Economic OpportunitiesSignificant economic prospects are anticipated to arise in El Salvador as a result of the building of the Hilton hotel complex. The hotel complex is expected to provide up to 5,000 direct and indirect employment once it is operating, with another 1,000 jobs expected to be created during the building period. This will help the tourist industry expand and strengthen the Salvadoran economy overall.

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El Salvador Seeks To Be The First Country To Legalize Bitcoin as Legal Tender

El Salvador President Nayib Bukele intends to introduce a bill to legalise Bitcoin (BTC) as flat money. If the national Congress pass the bill, the Central American nation will become the first country to accept Bitcoin as legal money, alongside the U.S. dollar.

Bitcoin expected to prompt financial inclusion

The 39-year old leader noted that BTC would boost the nation’s economy while addressing the Bitcoin 2021 conference in Miami, Florida State in a video broadcast. President Bukele stated:

“Next week I will send to congress a bill that will make bitcoin a legal tender.”

The bill intends to generate jobs in a nation where 70% of the population works in the informal economy and does not hold a bank account. President Bukele explained:

“In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy.”

He pointed out that financial inclusion should be considered a moral imperative and a way to boost the economy. Furthermore, it is a way that offers access to investment, savings, credit, and secure transactions.

Transforming the future of finance

The El Salvador president also disclosed the nation’s partnership with digital wallet firm Strike to transform the country’s financial structure using Bitcoin technology.

Bukele noted:

“We hope that this decision will be just the beginning in providing a space where some of the leading innovators can reimagine the future of finance.”

On the other hand, Jack Mallers, Strike founder, acknowledged:

“What’s transformative here is that bitcoin is both the greatest reserve asset ever created and a superior monetary network. Holding bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation.”

Meanwhile, a leading British multinational bank Standard Chartered, recently announced setting up a joint venture to buy and sell cryptocurrencies like Bitcoin. The Bank stated that it was actively seeking to establish partnerships with Hong Kong digital asset experts in launching a cryptocurrency exchange committed to developing digital assets.

Scholar Disagrees BTC as the medium of Legal Tender

Roger Svensson, Associate Professor of the Institute of Industrial Economics, suggests Bitcoin (BTC) is unsuitable as a medium of flat money for international currency. The scholar told the Financial Times Monday.

El Salvador President revealed last week that he intends to introduce a bill to legalise BTC as its legal tender to become the first country to accept BTC for boosting its economy. Svensson argues that BTC does not meet any primary conditions as an international currency. Firstly, BTC volatility is much greater than other dominant currency in history, such as the British pound or the US dollars.

He also thinks the price and the relative values of BTC are too fluctuating and unstable, which is a disadvantage to international trading. Also, the transaction cost is high enough due to its capacity of transaction system is limited and time-consuming within a period to meet the market’s needs.

Without a guarantee from an issuer, its political risk cannot be neglected if any or more than one government or regime prohibits the transaction of BTC. For instance, China regulatory bodies banned banks and financial firms from providing crypto transaction services recently.

Money is considered as the lubricant in the economy. However, Svensson criticises that BTC does not have this monetary function to act as a medium to store value or reduce transaction costs because BTC is only accepted within a limited group. However, BTC is treated as one of the cryptocurrencies. Still, anonymous characteristics may lead to a difficulty for the third party to trace back and recognise who is behind those transactions, which is risky to commit crimes, such as money laundering or tax evasion behaviour.

Furthermore, the energy consumed by BTC mining is environmentally unfriendly and high demanding to the “currency issuance”.

The trading of BTC recently was undergoing like a roller coaster. Elon Musk, the CEO of Tesla, has used to suggest on Twitter by accepting crypto as a way of payment but withdraw himself later, the price of BTC was experiencing a considerable fluctuation.

El Salvador Becomes the First Country to Accept Bitcoin as Legal Tender

El Salvador becomes the first country to adopt bitcoin as legal tender, with 62 votes approval out of 84. President Nayib Bukelet welcomes the so-called “Bitcoin law” and described this as a historical moment with a “supermajority”.

President Nayib Bukele announced this adoption on Twitter and said this is a historical moment. The so-called “Bitcoin law” was motioned on early Tuesday. Prior to the adoption, Bukele stated that it would require “every economic agents” to accept Bitcoin (BTC) payments and urge businesses to accept payments in cryptocurrencies.

“Bitcoin law” approved by the local Congress, with 62 votes in favour of out of 84 and signed as a law later. Bitcoin now becomes another legal tender in this Central American nation, alongside the U.S. dollar.

Up to 70% of the population in El Salvador cannot access traditional financial services. The government expects to promote the necessary training and mechanisms to conduct Bitcoin transactions.

The latest law aims to improve the regulation and the supervision of Bitcoin:

“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out.”

Prices of commodities can be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax. Meanwhile, the U.S. dollar will still be the reference currency for the price of Bitcoin, and the market will freely determine the exchange rate with The U.S. dollar.

Antony Portno, Founder of Traders of Crypto, commented on El Salvador making bitcoin legal tender:

“This is potentially a significant development and it will be interesting to follow its impact over the coming months and years. Cryptocurrency is indeed popular in more volatile nations where their own currency is quite unstable, but El Salvador uses US Dollars, so this is a clear move to legitimise citizens holding and transacting in Bitcoin instead of USD. “

Bitcoin, the largest cryptocurrency, rebounded after experiencing a sharp decline on early Tuesday. This latest development in El Salvador fueled the price and regained the momentum that has risen by 3.02% in the past 24 hours during intraday trading. Bitcoin was trading at $34,278, according to Coinmarketcap.

Portno further explained that It’s quite possible that it could trigger a snowball effect to South American and African countries by doing similar legislation with Bitcoin and other cryptocurrencies like Cardano.

Last week, the El Salvador president disclosed that the government developed a partnership with a digital wallet firm, Strike, to transform the country’s financial structure to use Bitcoin technology.

(Edited and Contributed by @Mervyn Kwan)

El Salvador President Proposes Volcanic-Powered Bitcoin Mining System

El Salvador President Nayib Bukele revealed his plans to explore geothermal energy from volcanoes to mining the cryptocurrency after the “Bitcoin law” passed as a legal tender in this Central American country.

As Bukele shared on his official Twitter handle, The President said engineers had dug a new well that will produce 95MW of renewable energy from the country’s volcanoes. A full Bitcoin mining ecosystem will be designed around it.

“I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company) to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, zero-emissions energy from our volcanos. This is going to evolve fast!” Bukele revealed this in the tweet.

“Our engineers just informed me that they dug a new well that will provide approximately 95MW of 100% clean, zero-emissions geothermal energy from our volcanos. Starting to design a full #Bitcoin mining hub around it.”

There has been a lot of concerns as it relates to the energy consumption of Bitcoin in recent times, a move that is fueling a clampdown on mining activities in some major crypto mining hubs in China. The need to shift from dirty energy sources such as coal to renewable options has caught the attention of Tesla CEO, Elon Musk who is no beginning to work with miners in the North American region for a potential shift to cleaner energy options.

El Salvador appears committed to helping grow the ecosystem around digital currency after the Bitcoin law signed into law. Bitcoin is estimated to use as much as 116.7 terawatt-hours of electricity per year, and El Salvador’s geothermal plants produce 644 MW. While the Caribbean nation may not offset the global energy requirement to rank number one in Bitcoin mining, its move into space can be certified as a 100% clean and renewable option.

IMF Concerns El Salvador Bitcoin Adoption as Legal Tender

The International Monetary Fund (IMF) expressed their concerns over the recent adoption of legalising Bitcoin (BTC) as a legal tender in El Salvador.

Per a Reuters report on Thursday, IMF officials concerned that the new development in El Salvador will cause severe legal and economic issues to urge that must analyse critically.

“Adoption of bitcoin as legal tender raises a number of macroeconomic, financial, and legal issues that require very careful analysis,” said Gerry Rice, an IMF spokesman, during a scheduled press briefing. “We are following developments closely, and we’ll continue our consultations with the authorities.”

El Salvador made history this week when its lawmakers approved President Nayib Bukele’s proposal to adopt the BTC as legal tender in the country. The decision was passed at the legislature with a landslide 62 in favour against 19 Nos. Bitcoin is now parallel with the United States Dollar, the official fiat money in this Caribbean nation over 20 years.

El Salvadoran officials are set to meet with the IMF team to discuss the new plan for Bitcoin. The country believes the cryptocurrency will lower the major barriers and impediments experienced in remittance inflows into the country. The discussions with the IMF and the funds’ concerns may be linked to the $1 billion worth of funding the nation seeks from the former.

El Salvador is all out to back its support for Bitcoin. Besides accepting it as a legal form of payment, President Bukele is also considering the option to build a BTC mining ecosystem around a new geothermal well created from one of its volcanoes. This clean energy mining will boost the country’s pursuit of Bitcoin. While the IMF may have concerns about the economic stance of the decision, environmentalists are poised to laud the clean energy mining idea.

CABEI Offers Assistance to Support El Salvador’s Bitcoin Adoption

The Central American Bank for Economic Integration (CABEI) head said that the multinational development bank would offer technical assistance to El Salvador to implement Bitcoin as legal tender, Reuters reported Monday.

In a press conference held Monday, Dante Mossi, the executive president of CABEI, said that the development bank would collaborate with El Salvador’s finance ministry and central bank to select a technical team to implement.

El Salvador’s government sought assistance from the institution in implementing Bitcoin cryptocurrency as a legal tender currency in the country. Mossi confirmed this at the press conference.

“We feel very proud that your government’s first choice in soliciting help and support with the implementation is the Central American Bank for Economic Integration,” he delivered the message to El Salvador President and his government.

Mossi further acknowledged that no other nation had adopted Bitcoin as widely as El Salvador has done. He admitted that it is a challenge that must find the best way to protect the public.

Mossi revealed the bank’s technical advisory group would be formed involving members of CABEI and officials from El Salvador’s central bank and ministry of finance. The bank also intends to help offer project planning and assistance navigating the legal aspects of implementing Bitcoin as El Salvador’s currency.

CABEI was jointly established in 1960 by El Salvador, Nicaragua, Gaugamela, Costa Rica, and Honduras works as a multinational development bank financial institution.

Its non-founding members include Belize, the Dominican Republic, and Panama, while other extra-regional members join, such as South Korea, Argentina, Mexico, and Spain.

Bitcoin Adoption Challenges

Last week, El Salvador became the first nation to adopt Bitcoin as a legal tender after Congress approved President Nayib Bukele’s proposal to embrace the cryptocurrency.

President Bukele submitted the bill to Congress after he announced early this month that El Salvador partnered with digital wallet company Strike to develop the nation’s modern financial infrastructure using Bitcoin technology.

A few days later, the President of El Salvador announced that the country’s state-run geothermal energy utility would start using power generated from volcanoes to operate Bitcoin mining. The announcement was made just hours after the Central American country’s congress voted to make the crypto an acceptable legal tender.

However, the IMF (International Monetary Fund) warned El Salvador about the risks of using cryptocurrency for day-to-day transactions. An IMF team scheduled to meet with El Salvador’s president as the international organisation weighs another relief package for the nation amid its recovery from the coronavirus pandemic.

Meanwhile, President Bukele disclosed that he was in talks with the IMF and stated that he would explain the workings in detail and the status of the economy now that how the currency works a legal tender in the nation.

World Bank Refuses El Salvador’s Request to Assist Bitcoin Currency Adoption

On Wednesday, June 16, the World Bank announced that it rejects helping El Salvador to implement its Bitcoin adoption agenda given environmental and transparency concerns.

“We are committed to helping El Salvador in numerous ways, including for currency transparency and regulatory processes,” the World Bank spokesperson stated via email.

The World Bank spokesperson further explained that it is not something that the World Bank can provide help with, given the transparency and environmental concerns, before El Salvador approached the international financial institution to assist Bitcoin implementation.

EI Salvador’s Finance Minister Alejandro Zelaya disclosed that he clarified to the IMF that the country does not abandon the US dollar by replacing flat money with Bitcoin.

Earlier on Wednesday, EI Salvador’s Finance Minister Alejandro Zelaya said that the nation had sought technical support from the World bank to use Bitcoin as a parallel legal tender alongside the US dollar.

Although the International Monetary Fund (IMF) last week cited legal, financial, and macroeconomic issues associated with EI Salvador’s Bitcoin adoption, the minister revealed that the ongoing negotiations with the IMF have been successful.

Zelaya clarified that the IMF was not against EI Salvador’s intention to implement Bitcoin cryptocurrency. However, the IMF has not given a response to comment on the matter.

While EI Salvador sought technical assistance from the World Bank on rules and implementation of Bitcoin, Zelaya disclosed that the country would not replace the US dollar with the leading cryptocurrency as a legal tender.

“We gave our official position to the IMF. We have been emphatic; we are not replacing the U.S. dollar as legal tender in El Salvador,” Zelaya said.

El Salvador is in the process of engaging in loan negotiations with the IMF for a $1 billion program to patch budget gaps through 2023.

Zelaya stated that El Salvador continues to hold negotiations with the IMF and described the talks as successful.

Bitcoin Helps Salvadorans Without Bank Accounts

Last week, El Salvador became the first nation to adopt Bitcoin as legal tender, with President Nayib Bukele touting the crypto’s potential as a remittance currency for Salvadoran overseas.

While President Nayib attended the Bitcoin Miami conference in Florida on June 5, he talked about a major economic policy change that would enable El Salvador to adopt Bitcoin as an official currency, running parallel with the US dollar.

The nation has been using the US dollar as a legal tender over the last twenty years before abandoning its national currency.

Bitcoin cryptocurrency could be of significant help in a country where 70% of the population don’t have bank accounts. President Bukele, who pushed through the Bitcoin law, touts the cryptocurrency to help those many Salvadorans without access to traditional banking services and as a path to attract foreigners with Bitcoin holdings to invest in El Salvador.

El Salvador Airdrops $30 for Bitcoin Handout, BTC Will Become Legal Tender in September

El Salvador President Nayib Bukelet announced Bitcoin (BTC) would become another legal tender, effective on September 7. The government is also giving a cash handout by offering $30 in Bitcoin to the public.

Bitcoin along the dollar will become the legal tender in El Salvador in September. People can choose any of them as a payment medium.

To attract and stimulate the widespread use of Bitcoin in El Salvador, El Salvador’s President Nayib Bukele pitched on Twitter that the government will launch a new product called “Chivo” E-wallet, meaning “cool” in Spanish. Every user who downloads and registers the e-wallet will get Bitcoins worth 30 US dollars.

Bukelet stated that:

“The purpose of Bitcoin law is to connect our country with the rest of the world, bring foreign exchange, investment and tourism, and boost our economy.”

This App will supports users conduct transactions, payment and remittance by scanning QR codes. It can also buy and sell Bitcoin exchanges and covert Bitcoins and U.S. dollars instantly in the e-wallet. The platform is suitable for Android and iOS devices and is expected to launch in September.

The public can transfer or receive their money or in Bitcoin directly or transfer to the recipients’ accounts in US dollars through the “Chivo” e-wallet. Bukelet stated that the public is not mandatory to use Bitcoin if they are unwilling to accept Bitcoin.

Some voices are concerned if the use of Bitcoin will turn out to commit a crime or illegal activities. Bukele insisted that the U.S. dollar will continue to circulate at the same speed as Bitcoin. He added that salaries and pensions would continue to be paid in U.S. dollars.

Meanwhile, American Bitcoin ATM producer Athena Bitcoin announced that it intends to invest more than $1 million by installing more than 1,500 cryptocurrency ATMs in El Salvador, providing residents with a more convenient channel to buy and sell bitcoin and promote Bitcoin transactions.

El Salvador has become the first country to adopt Bitcoin as legal tender since early this month after the national congress passed the so-called “Bitcoin law” with 62 votes approval out of 84.

Bitcoin, the world’s largest cryptocurrency with a market cap of $640,230,486,459, was trading at $34,081.52 during the intraday, according to Coinmarketcap.

Paraguay Introduces Bill to Make Bitcoin Legal Tender

South American nation Paraguay has introduced a bill in its national assembly to make Bitcoin a legal tender, trailing the path of El Salvador.

Congressman Carlitos Rejala introduced the Paraguayan Bitcoin bill, which will position Paraguay to advance in line with this new generation if the bill passed successfully.

“As I was saying a long time ago, our country needs to advance hand in hand with the new generation. The moment has come, our moment. This week we start with an important project to innovate Paraguay in front of the world!” Rejala said in a Tweet, per a Google translated version.

The idea behind implementing Bitcoin as a legal tender has long been debated amongst the cryptocurrency communities. El Salvador President Nayib Bukele broke history when he officially persuaded lawmakers to pass the Bitcoin as a Legal Tender Bill. Following the plans to affect the implementation of the cryptocurrency by September 7th.

Learning from El Salvador’s current struggles, the roadmap on implementing the Bitcoin bill may be arduous. First, the International Monetary Fund (IMF) warned of legal and economic challenges that may impact the implementation and eventual transition to Bitcoin in El Salvador.

Additionally, the World Bank refused the Caribbean Island nation’s request by offering help to implement plans, citing the lack of transparency and environmental considerations. Paraguay may face similar challenges if the administration insists on conducting this path.

Just as El Salvador is planning to venture into Bitcoin mining through Geothermal energy obtained from its Volcanoes, Rejala and the proponents of the Bitcoin bill believe Paraguay can also leverage its excess hydroelectric to mine Bitcoin.

According to Euronews, the bulk of Paraguay’s energy is currently sold to neighbouring countries, including Brazil and Argentina. While the Bitcoin bill is still in its infancy, the country’s Bitcoin industry stakeholders are gearing up for the opportunities that lie ahead.