The initiative was sent by the Executive in November last year to Parliament.
The Legislative Assembly of El Salvador approved this Wednesday, with 62 votes in favor and 16 againstthe draft Law on the Issuance of Digital Assets.
This is an initiative sent by the president of the Central American country, Nayib Bukele, in November last year to Parliament.
Before reaching the plenary session for its final vote, the regulations was approved by the Economic Commission of the Legislative Assembly.
The purpose of the law
Since September 2021, El Salvador has bitcoin as its legal circulation currency, as part of Bukele’s economic commitment to the Central American country.
As can be read in the document sent by the Executive to Parliament, the legalization of bitcoin “has created an important new sector” in the country’s economy, so it is “crucial to create mechanisms that allow public and private sector entities to can issue public offerings of digital assets”.
So, says the text, the regulations are intended to “establish the legal framework that grants legal certainty transfer operations to any title of digital assets that are used in the issuance of public offerings carried out in the territory of El Salvador”.
Likewise, its purpose is to “regulate the requirements and obligations of issuers, digital asset service providers, and other participants that operate in the public offering process.”
All this with the aim of “promote the efficient development of the digital asset market and protect the interests of acquirers”, says the initiative.
In the text, however, it is made clear that the regulations go beyond bitcoin. They define a digital asset as “a digital representation that can be stored and transferred electronically” using a Distributed Ledger Technology (DLT) or similar system “in which the records are linked and encrypted to protect the security and privacy of transactions.
new entities
The document establishes that public offerings with digital assets can be carried out by the State, the Ministry of Finance, the Central Reserve Bank, autonomous institutions, as well as private natural and legal persons.
The legislation establishes the creation of a so-called National Commission of Digital Assetsthe entity that will ensure the correct application of the regulations, which will have among its powers to promote and strengthen the favorable conditions for the development of the digital asset market in El Salvador.
Agency is also created Bitcoin Fund Manager (AAB)which will be in charge of the “administration, protection and investment” of the funds from the public offerings of digital assets carried out by the State and its autonomous institutions, and the returns from said operations.
The regulations establish that the AAB must “diligently invest” the funds from public offerings, prioritizing “public works and projects.”
Also, it creates Registry of Digital Assets Service Providers, which will be administered by the National Commission of Digital Assets. According to the document, these providers may carry out:
- Exchange of digital assets for others or for fiat money.
- Operate an exchange or trading platform for digital assets.
- Risk and price evaluation, as well as the subscription of digital asset issues.
- Placing digital assets on digital platforms or wallets.
- Promote, structure and manage all kinds of investment products in digital assets.
In addition, the law proposes the creation of a Issuers Registry, for those who wish to make public offerings of digital assets. It will also be managed by the National Digital Assets Commission.
After its approval in Congress, the Digital Assets Issuance Law will be ratified by the Executive and will enter into force eight days after its publication in the country’s official gazette.
detractors
The law has its detractors. Deputy Anabel Belloso, from the Farabundo Marti National Liberation Front (FMLN), he pointed, in a message on his Twitter account, that this law, like the legalization of bitcoin, “will be more public spending, tax exemption for the rich”; that is, “loss to the population.”
He points out that this occurs “at a time when the ‘crypto’ world is in crisis, with values on the ground and cases of fraud.”
More information, shortly.
Source: RT
