The Digital Assets Issuance Law, which outlines the guidelines for the government to launch public offerings relating to cryptocurrencies, has at last been approved by El Salvador’s Legislative Assembly.
The law’s primary objective is to establish the framework for transfer operations that provides legal certainty to any title of digital assets utilised in El Salvador’s issue of public offerings. It was passed with a majority due to the backing of Nayib Bukele’s party.
The legislation also establishes the Bitcoin Revenues Managing Agency, an independent organisation that will oversee the funds the state will receive from the sale of cryptocurrency-based bonds and will work closely with the El Salvadorian Treasury.
The passing of this bill, which was first proposed in November, will lay the groundwork for the long-promised issue of the volcanic bonds, a group of debt securities that will help pay for some of the country’s Bitcoin City’s development.
The city would be constructed using $1 billion from these bonds and run entirely on geothermal energy, making it tax-free and carbon-neutral.
According to claims made by Alejandro Zelaya, the country’s Treasury Minister, El Salvador had planned to issue the volcano bonds last year, but the government continually postponed release because of the crypto market conditions and the escalating conflict between Ukraine and Russia.
However, this law does not sit right with some deputies as they revealed their displeasure at the passing of this law. According to opposition coalition member Johnny Wright, El Salvador is fostering an ecosystem that makes it easy to launder money and engage in tax evasion.
Additionally, the bill opens the door for Bukele’s government to issue bonds without any oversight, according to deputy Claudia Ortiz. Even then, there is currently no timeframe for when the volcano bonds will be issued.
