El-Salvador submits New Bill to legalize Cryptocurrencies
El Salvador’s Economy Minister, Maria Luisa Hayem Brevé, has proposed a Digital Assets Issuance Bill. In this extensive document, a legal framework for the acceptance of all cryptocurrencies in El Salvador has been formally detailed and laid out.
Nayib Bukele, the president of El Salvador, declared on November 16 that his nation would begin buying one Bitcoin (BTC 4.81%) per day, starting from November 17, despite the historic collapse of the cryptocurrency market. This country has already invested over $100 million in Bitcoin.
The Need For Revamping Digital Asset Laws
The law would govern any digital asset transfer operation in order to “promote the efficient development of the digital asset market and protect the interests of acquirers.”
It creates a specific regulatory framework for cryptocurrencies by separating them from all other assets and financial goods. The regulation is unambiguous since a digital asset must make use of a distributed ledger or a similar technology in order to be included in this category.
The framework of the law excludes dealings with CBDCs, transactions involving non-tradable or non-exchangeable assets, transactions involving restricted assets, such as securities and transactions involving sovereign assets subject to foreign law.
The following are some of the more intriguing aspects of the law:
- Creation of a registry of digital asset suppliers/providers.
- Full crypto legalization.
- Definition of stablecoins and tokens.
- Regulation of public offerings of digital assets.
- Tax exemption in some cases.
El-Salvador submits the Bitcoin bill
The initiative to bring capital and investors to El Salvador was first mentioned in the announcement of the bill one year ago. It intends to issue $1 billion in bonds on the Liquid Network, a federated Bitcoin sidechain. Of the proceeds from the bonds, $500 million would be allocated directly to bitcoin, while the remaining funds will be used to develop the area’s energy and bitcoin mining infrastructure.
El Salvador will be able to serve as the financial hub of Central and South America, thanks to the digital securities law. To be able to handle and list the bond issuance in El Salvador, Bitfinex will be granted a license. The bonds will offer a 6.5% interest and allow investors to obtain citizenship quickly.
Tether Reacts to Stablecoin Law
The new regulations seek to expand the market for digital assets accepted in El Salvador beyond Bitcoin. Stablecoins, which are obviously of significant importance to the Tether team, are among the digital assets that will now be officially permitted.
Bukele’s apparent desire to provide a safe haven for companies dealing in digital assets who prefer to avoid more highly regulated jurisdictions may potentially contribute to the popularity of the new rules.