Salvadoran lawmakers pass law on issuing digital assets in bitcoin haven

[ad_1]

By Nelson Renteria

SAN SALVADOR (Reuters) – El Salvador, which became the first country in the world to recognize bitcoin as legal tender two years ago, approved a law on Wednesday that would regulate the issuance of other digital assets by the state and private entities.

The bill, backed by ruling party lawmakers allied with President Nayib Bukele, aims to attract domestic and foreign investors while creating new funding opportunities for citizens, businesses and the government.

Lawmakers in the unicameral Congress dominated by Bukele’s New Ideas party passed the proposal with an overwhelming majority of 62 votes in favor and just 16 against.

“The purpose of this law is to establish the legal framework that grants legal certainty to transfer operations in any capacity of digital assets used in public issue offers,” according to the legislation.

Public offerings can be made by issuers using existing digital assets, with the ability to create new ones, the law says.

The law also establishes the creation of the National Commission for Digital Assets and the Bitcoin Funds Administration Agency, which will be responsible for managing, safeguarding and investing funds from public offerings of digital assets made by the government.

The provisions of the law are not applicable to digital currencies issued by the central banks of any country or territory, whether they are so-called fiat currencies issued by these banks or cryptocurrencies.

Nor would it apply to digital assets that by law are legal tender such as bitcoin, in addition to the video game ecosystem or non-fungible tokens.

Bukele’s office did not immediately respond to a request for comment asking whether the new legislation would apply to the launch of bitcoin volcano bonds the president announced in late 2021.

Nevertheless, President Bukele shared a message from the country’s bitcoin office on Twitter saying that the law also paves the way for the upcoming issuance of volcanic bonds.

(Reporting by Nelson Renteria; Editing by Ana Isabel Martinez; Editing by Diane Craft)

[ad_2]