El Salvador Submits Digital Securities Bill

El Salvador is moving forward with plans to sell bitcoin-backed bonds, as evidenced by the national assembly’s consideration of a Digital Securities Bill to govern digital assets. Maria Luisa Hayem Breve, the nation’s minister of economy, delivered the measure to the Legislative Assembly of El Salvador.

The 33-page document states that the measure proposes to create a National Digital Assets Commission, which would be in charge of overseeing the regulation of those that issue digital assets, provide services for them, and engage in the “public offering process” for digital securities.

If adopted, the Digital Securities Bill will control the transfer of any kind of crypto asset, not simply Bitcoin, which is presently accepted as payment. According to a statement, it aims to support the effective development of the digital asset market and protect acquirers’ interests. It also distinguishes cryptocurrencies from other financial assets and creates a brand-new framework for them. 

According to Caracas, if the bill is passed, it will lead to the establishment of a registry of digital asset suppliers and providers, complete legalization of cryptocurrencies, the definition of stablecoins and tokens, regulation of initial coin offerings of digital assets, and in some circumstances, tax exemption.

Digital Securities Bill Will Pave Way for Bitcoin-backed Bonds

The bill also makes it possible to issue the El Salvador volcano bond, which was first proposed in November 2021. Alejandro Zelaya, El Salvador’s finance minister, cited the conflict in Ukraine and Russia as the reason for the postponement of the country’s “volcano bonds” issue, which had been scheduled for March 2022.

If adopted as law, the new regulations would require the establishment of a Bitcoin Fund Management Agency that would be in charge of managing, protecting, and investing “funds from public offerings of digital assets carried out by the State of El Salvador and its autonomous institutions,” as well as any profits from these offerings.