El Salvador Approved Digital Asset Issuance Law, New Step For Bitcoin Bonds

Key Points:

• Recently, El Salvador approved a digital asset issuance law, paving the way for Bitcoin bonds advocated by President Nayib Bukele.
• The new law provides legal certainty for transferring any digital asset offered for sale in the country.
• El Salvador has been preparing for Bitcoin bonds since at least the beginning of 2022.

In an official announcement, El Salvador approved a digital asset issuance law that brings the country closer to Bitcoin bonds.

It also established a new government agency to regulate digital assets in El Salvador.

The Executive promoted this motion, which was introduced into parliament last November. According to article 3 of the proposal, digital asset is a digital representation that can be stored and transferred electronically, using a Distributed Recording Technology system or similar or similar technology, where the records are linked and encrypted to protect the security and privacy of the transactions.

According to the ruling party, the new law provides certainty in transferring digital asset offerings to the public in El Salvador.

For opposition delegates, however, the regulations facilitated money laundering and tax evasion and left the Nayib Bukele government more indebted.

It is reported that El Salvador has been preparing for Bitcoin bonds since at least the beginning of 2022. The law will open favorable conditions for Bitcoin bonds, such as the “Volcán” bond that President Bukele introduced since the law’s inception. Bitcoin is a legal tender in El Savior.

Digital asset service providers in El Salvador must complete the registration process and comply with the proposed law’s provisions.

These entities must provide a list of the digital assets they intend to issue, including the “benefits and limitations” of those assets. They must also demonstrate cybersecurity precautions and customer service capabilities and provide the names and titles of company employees. In addition, digital asset issuers must also disclose information about the jurisdiction or country in which they operate.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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