• El Salvador has passed a new legislation called Digital Asset Issuance, which sets up a legal framework for tokenized securities, altcoins, and businesses.
• The new law is expected to set the stage for the issuing of President Nayib Bukele’s bitcoin bonds, aka, the Volcano Bonds.
• The legislation will focus on setting up a legal framework around the issuance of digital assets and the wider crypto classification, which includes every other type of digital asset in the market besides Bitcoin.
El Salvador has taken a major step towards enabling the issuance of Bitcoin-backed bonds, which are expected to be issued by its President Nayib Bukele. On the 12th of January 2021, the Legislative Assembly of El Salvador voted to pass a historic law – the Digital Asset Issuance legislation. This sets up a regulatory framework for tokenized securities, altcoins, as well as businesses.
The new legislation marks a significant milestone in the country’s efforts to make Bitcoin legal tender in the country. President Bukele himself has been a strong proponent of the cryptocurrency and has stated that he is keen to make El Salvador a leader in the cryptocurrency space. His proposed Bitcoin bonds, which have been dubbed the “Volcano Bonds”, will be the first of its kind in the world.
The new law will focus on setting up a legal framework around the issuance of digital assets and the wider crypto classification, which includes every other type of digital asset in the market besides Bitcoin. This means that investors and companies will be able to launch their own digital assets, such as tokenized securities, as well as altcoins.
The legislation also sets up a framework for the registration and regulation of digital asset businesses. This will ensure that the businesses are compliant with the laws of the country, which will in turn provide greater protection to investors. It also seeks to provide a much-needed regulatory clarity for the cryptocurrency industry in El Salvador.
The passing of the Digital Asset Issuance law marks a new era in the cryptocurrency industry of El Salvador. With this new law in place, the country is now in a better position to launch the Volcano Bonds, which will be a major milestone in the development of the cryptocurrency space in the country. Going forward, the country is expected to become a leader in the cryptocurrency space, as it already has the legal framework in place to launch innovative projects.