Before the Bitcoin Law was announced, Bitcoiner and Strike CEO Jack Mallers reached out to us to talk about El Salvador’s plans to adopt Bitcoin. We were very excited to support the government of El Salvador in their initiative, and as we discussed Bitcoin with them, one of the things we proposed was the “Bitcoin Bond.”
We’ve been in talks with El Salvador for months and we’ve put in a massive amount of effort in designing and modeling the bonds. This bond offering is something we think will be attractive to a wide range of investors ranging from cryptocurrency investors, investors seeking yield, HODLers, and ordinary people. We believe this bond has the potential to accelerate hyperbitcoinization and bring about a new financial system built on top of Bitcoin.
Today, the president of El Salvador and I have announced that they will be issuing a $1 billion US “Bitcoin Bond” on the Liquid Network. The $1 billion US raised will be split between a $500M allocation of bitcoin (BTC) and a $500M infrastructure spend for building out energy and Bitcoin mining infrastructure in the region.
El Salvador also aims to create a government securities law and grant a license to Bitfinex Securities to process the bond issuance. This could pave the way for other Liquid security tokens like the Blockstream Mining Note (BMN) or Exordium (EXO) token to be listed on a regulated El Salvadorian securities exchange.
I’m incredibly grateful to Jesse Knutson, Blockstream’s VP of Financial Products, for working with me over the last few months to design and model the Bitcoin Bond, as well as the government of El Salvador for the opportunity to work together to build this new Bitcoin-based financial system.
The future of financial products belongs on Bitcoin, and the Bitcoin Bond is the first step in achieving global inclusivity for finance; much like how Bitcoin created global inclusivity for money.
Special Dividends
The Bitcoin Bond will have special dividends dispersed on an annual basis generated by the staggered liquidation of bitcoin. Using Blockstream’s Asset Management Platform (AMP), dividends are easily paid out to bond holders.
Since we’re using the Liquid Network and Blockstream AMP, we’re also able to easily accept investments as small as $100 to democratize access to the bond.
Looking Forward
The Bitcoin Bond represents the start of a reformation of capital markets, built on Bitcoin and layer-2 technologies like the Liquid Network. Now, investment capital can flow in from around the globe without friction. Dividends can be distributed to investors instantly, with built-in cryptography to maintain confidentiality. Bonds can be traded 24/7 with other assets like stablecoins, using protocols that help eliminate the need for trust.
Bitcoin will save the day.