Lawmakers to vote on digital asset issuance in El Salvador. El Salvador’s legislature is considering a long-awaited law to regulate digital service providers. The Central American country made bitcoin legal in September 2021. A committee in the Legislative Assembly of El Salvador is considering a long-awaited law to regulate providers and providers of digital assets in the country.
The so-called “Digital Asset Issuance Law” will create a legal framework for companies issuing digital assets in El Salvador and create a national service to manage their certification and services. The digital currency bill is currently before the Legislative Economics Committee, according to a document that Block saw and confirmed through the broadcast of the session of November 22. The new law will have the “objective of promoting the efficient development of the market for digital assets and protecting the interests of the beneficiaries”, according to the text.
It is significant because it refers to digital assets, instead of focusing on bitcoin, which El Salvador adopted as a law in September 2021. However, the new initiative focuses on providing regulations for the public offering of digital assets rather than making other cryptocurrencies legally available.
El Salvador Digital Currency
Providers of digital currency services in El Salvador must go through a registration process and follow several rules under this proposed law. These companies should provide a list of the digital assets they plan to offer, including their “benefits, limitations and limitations.” They should also demonstrate cybersecurity precautions and customer service capabilities, as well as provide the names and addresses of company employees.
Digital asset providers must also comply with certain laws, such as disclosing information about the jurisdiction or country where they operate. The proposal also talks about the creation of a company called “Bitcoin Fund Management Company” which will be for “control, security and investment through public offerings of digital assets made by the State of El Salvador and companies independent”. and the fruits of such public offerings.”
Other laws focused on digital assets or securities may apply. The President of El Salvador Nayib Bukele said in February the government is working on 52 reforms aimed at security laws, tax incentives and other things. The Block reported that El Salvador is developing a legal framework for providers of digital currency services ahead of the initiative called “bitcoin bond” in mid-March, which has not been implemented.
At the time, Paolo Ardoino, CTO of Tether and Bitfinex, said that the Salvadoran government is working on a process to authorize companies that offer digital assets. Bitfinex Securities said it plans to apply for a license to allow a bitcoin issuer to monetize its platform, but is still waiting for regulatory approval.
“The Digital Securities Law will allow El Salvador to become the financial center of Central and South America,” Ardoino tweeted.