Bitcoin
El Salvador tokenizes investments in Bitcoin Sidechain
Last updated: May 15, 2024 5:42 pm EDT | 1 minute reading
El Salvador took a decisive step towards tokenization on Tuesday, revealing national investment opportunities based on Bitcoin infrastructure.
El Salvador Bitcoin: Investing in Development
The country’s National Bitcoin Office has launched its blockchain-based capital raise on the Liquid network.
Bitcoin-based capital markets have officially launched in El Salvador, the first country to adopt Bitcoin. Congratulations to ONBTC and @BFXSecurities in this historic landmark! https://t.co/6SCPvjiunx
– Liquid Network 🌊 (@Liquid_BTC) May 15, 2024
Liquid is a Bitcoin sidechain managed by Blockstream and a federation of 65 Bitcoin-centric companies around the world. Using BTC as its native asset, the blockchain facilitates faster, cheaper, and more private transactions than the main Bitcoin blockchain.
In addition to BTC, Liquid allows the issuance of tokens representing various assets, including stablecoins like Tether (USDT)meme coins and real-world assets and bonds.
One of El Salvador’s symbolic offers involves investing in the construction of the first hotel at El Salvador International Airport. The investment would yield 10% annually over a five-year period, requiring a minimum investment of $1,000.
“The infrastructure will include 80 rooms, five commercial spaces with 99 square meters each, a swimming pool and various amenities such as restaurants, gym, gardens, multipurpose rooms, among others”, states the offer on the Inverlag Hotels website.
Tokenized Offerings on the Liquid Network
Investors would also guarantee free nights at the hotel they are helping to build. Anyone who invests $1 million receives a free year-round stay for the five-year life of the bond.
“These opportunities are typically not available to the general public,” explained Roberto Laguardia, CEO of Inverlag, in an interview. “They are generally reserved for large-scale or institutional investors and private equity firms… However, with a minimum investment of $1,000, individuals can access a 10% interest rate, paid semi-annually, over a period of five years.”
The tokenized issuance was led by El Salvador-based Bitcoin startup DitoBanx, while the exchange platform used to issue the tokens is Bitfinex. Due to regulations, investment is not available to US investors.
Advantages of tokenized investments
El Salvador is the first and only country in the world to treat El Salvador Bitcoin as legal tender alongside the US dollar. The state regularly invests in BTC and runs a Bitcoin mining operation powered by geothermal energy from the region’s local volcanoes.
El Salvador’s adoption of Bitcoin goes beyond its legal tender status, as these new tokenized investment offerings demonstrate. The Bitcoin Office said this week that the nation has mined 474 BTC since 2021 and now holds 5,750 BTC ($378 million) in total.