El Salvador creates legal framework for volcanic bonds and cryptocurrency exchange

The digital asset issuance law proposed by the Government of El Salvador to the Legislature aims to establish a regulatory framework for the issuance of bitcoin-backed “volcano” bonds, but will also allow other crypto assets to form a “safe place” to exchange. “For crypto businessmen, this is in the midst of the resounding decline of risky assets.

The 47-item regulation allows companies operating in the country to issue digital assets and aims to pave the way for the issuance of volcanic bonds, which El Salvador will issue to finance infrastructure projects, according to Bitcoin Magazine. buy bitcoin.

Mario Gómez, a computer scientist and critic of bitcoin adoption in El Salvador, agrees with this analysis and recalls that “we already warned that this law is necessary for the issuance of volcanic bonds.” But the law will also allow for “any digital assets to be taken out” in a loophole in the Twitter account.

Economy Minister María Luisa Hayem justified the initiative, saying that “the market for digital assets has grown rapidly over the past twelve years and it is essential that the State, autonomous institutions and the private sector be allowed to finance themselves.” new market”

However, Gómez warns that “we are in the midst of a collapse in the crypto world where trust in cryptocurrencies is on the ground,” so this law is actually aimed at “protecting crypto business people.”

Bitcoin price failed to break past the historical minimum of $16,000; Other tokens like Tether and Ethereum are holding the bearish line below $1,180 and $999 respectively.

“When this law comes into effect, crypto entrepreneurs and clearing houses can move their operations to El Salvador because there will be no wealth management taxes and even the registration fee will not be very high. In the troubled waters of the crypto market, Bukele management has made El Salvador a crypto haven, a tax haven. He wants to put him in position.”

Meanwhile, bitcoin maximalists and advocates celebrated the initiative presented by the Government. Paolo Ardoino, CTO of Bitfinex cryptocurrency exchange, wrote on Twitter that “the digital securities law will allow El Salvador to become the financial center of Central and South America.”

According to reports from Coindesk and Bitcóin Magazine, Ardoino will have a license to process and list the Bukele administration’s issuance of volcanic bonds.

Alexia Rivas, deputy of Nuevas Ideas, announced that the new digital assets law will allow El Salvador to issue bitcoin volcano bonds, an issue expected since last March but delayed by the Ministry of Finance.

A year ago, El Salvador announced that it was seeking to attract investors to issue $1 billion in bonds on Liquid Network, with the aim of investing $500 million in buying more bitcoin and another $500 million in Bitcoin City infrastructure. A source close to President Nayib Bukele also confirmed to Bitcoin Magazine that the law will be approved before Christmas.

Create a “bitcoin office”

The Ministry of Economy of El Salvador has also created the National Bitcoin Office, an administrative and autonomous unit within the Presidency of the Republic, which will “act on the direct instructions of the president,” as announced in the Official Gazette on November 17. On the same day, Bukele announced that El Salvador would receive one bitcoin per day.

This new office will be responsible for designing and providing information to the media and “any interested party”, but will also have the power to coordinate and channel “all funding and support needs for bitcoin, blockchain and cryptocurrencies related projects”.