Blockstream, a blockchain technology startup, has been in talks with the government of El Salvador about creating a new digital bond denominated in US dollars. Their suggestion coincides with El Salvador’s efforts to legalize bitcoin (BTC).
According to sources, Blockstream’s Chief Strategy Officer, Samson Mow, proposed the bond to El Salvador government officials this week. According to reports, the officials have expressed interest but have yet to make a final decision.
El Salvador would issue dollar-denominated bonds, which would pay a coupon, according to Blockstream’s proposal. This discount would be sent in the form of a tokenized security based on one of Blockstream’s offerings. Blockstream AMP, for example, allows customers to manage digital assets on the Liquid Network of the corporation.
El Salvador had previously received funding from the exchange, which is situated in British Columbia, Canada. President Nayib Bukele advocated making BTC legal tender for the first time around this time.
On June 5, the corporation sent out a multi-tweet thread outlining how it will assist public and private stakeholders in the country.
“Providing #Bitcoin and @Liquid BTC satellite infrastructure to ensure redundancy of those networks,” according to the list.
It further stated that “[their] knowledge in enterprise mining operations and energy management would be used to help the development of the Bitcoin mining business in El Salvador.”
Blockstream also stated that they would provide advice to the government of El Salvador on hardware security module (HSM) solutions for safeguarding bitcoin holdings.
El Salvador faces challenges with BTC rollout
President Bukele’s promise to declare BTC legal tender was fulfilled less than a week later, as reported on June 6. Out of 84 members of Congress, 62 voted in favor of his bill.
However, the country’s BTC deployment has run into a number of roadblocks since then. A citizen group is said to have just filed a lawsuit against El Salvador for accepting Bitcoin as legal money.
The group was led by politician Jaime Guevara. He is also a member of the Farabundo Mart National Liberation Front, an opposition group (FMLN).
The law that recognized BTC as legal money, according to Guevara, was “unconstitutional.”
This lawsuit was filed just days after the World Bank declined El Salvador’s request for help in implementing BTC. It cited environmental and transparency issues as factors for its decision.
Furthermore, according to a study done by the El Salvador Chamber of Commerce and Industry, 80% of Salvadorans would refuse to be paid in BTC.