Legislative Assembly of El Salvador. Photo: RT
El Salvador’s Legislative Assembly voted this Wednesday 62 votes for and 16 againstthe Bill on the Issuance of Digital Assets.
This is an initiative that the President of the Central American country, Nayib Bukele, submitted to Parliament in November last year.
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 had Bitcoin as its legal circulating currency as part of Bukele’s economic commitment to the Central American country.
According to the document sent by the Executive to Parliament, Bitcoin legalization “has created an important new sector” in the country’s economyTherefore, it is “crucial to create mechanisms that allow public and private entities to issue public offerings for digital assets”.
So, according to the text, the regulation should “the Legal framework that provides legal certainty transfer operations to any title of digital assets used in the issuance of public offerings 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 engaged in the public offering process.”
All this with the goalPromote the efficient development of the digital asset market and protect the interests of the buyers,” says the initiative.
However, the text makes it clear that the regulations go beyond Bitcoin. They define a digital asset as “a digital representation that can be stored and transmitted electronically” using distributed ledger technology (DLT) or a similar system “in which the records are linked and encrypted to ensure security.” and protect transaction privacy.
new entities
The document stipulates that public offerings of digital assets can be conducted by the state, the Ministry of Finance, the Central Bank, autonomous institutions, and private individuals and legal entities.
The law provides for the creation of a National Digital Assets Commissionthe body that ensures the correct application of the regulations and whose powers include promoting and strengthening the favorable conditions for the development of the digital assets market in El Salvador.
The Bitcoin Funds Administration Agency (AAB) is also formedwhich will be responsible for the “management, protection and investment” of the funds from the public offerings of digital assets by the state and its autonomous institutions, and the proceeds from these operations.
The regulations state that the AAB must “diligently invest” the funds from public offerings, with “public works and projects” taking precedence.
Besides, it works Register of Digital Asset Service Providers, administered by the National Commission of Digital Assets. According to the document, these providers can:
- Exchanging digital assets for others or for fiat money.
- Operate an exchange or trading platform for digital assets.
- Risk and price assessment and underwriting of digital asset issues.
- Placement of digital assets on digital platforms or wallets.
- Promote, structure and manage all types of investment products in digital assets.
- In addition, the law proposes the creation of a issuer register, for those who want to offer digital assets publicly. It is also managed by the National Digital Assets Commission.
- After approval by Congress, the Digital Asset Issuance Act will be ratified by the executive branch and will go into effect eight days after its publication in the country’s official gazette.
critic
The law has its critics. Farabundo Martí National Liberation Front (FMLN) MP Anabel Belloso pointed out in a message on her Twitter account that this law, like the legalization of Bitcoin, will mean “more public spending and tax exemptions for the rich”; that is, “losses to the population.”
Point out that this silk “In times when the ‘crypto’ world is in crisiswith on-site values and cases of fraud”.
Economist Rafael Lemus said in a recent interview with El Salvador that the regulations will be approved “in an environment where the world of these operations (of digital assets) is being tracked.”
“It’s like making the best shelter where they won’t haunt me. It is already quite clear that there is no underlying asset behind these assets, what there is is a speculative bet encouraging them to thrive, re-enacting regulations for these climates, it’s like re-creating habitats for scammers ‘ he explained.
(Taken from RT in Spanish)
See also:
Latin America increases cryptocurrency usage by 40% compared to 2021