The government of President Nayib Bukele, presented to Congress for its analysis and eventual approval a proposed law on digital assets that will facilitate the issuance of about 1 billion dollars in cryptobonds.
The proposal for the “Law of Issuance of Digital Assets” was submitted to Congress by the Minister of Economy, María Luisa Hayem, last November 17, according to a copy of the same released by the Presidential House on Tuesday night.
In its recitals, the proposed law states that “it is crucial to create mechanisms that allow public and private sector entities to carry out public offerings of digital assets”, so it is necessary to “establish regulatory frameworks to regulate such issues in the country”.
In its article 1, the proposed law indicates that the purpose of the same is to grant “legal certainty to the operations of transfer to any title of digital assets that are used in the issuance of public offerings”.
El Salvador became in September 2021 the first country in the world to give legal tender in its economy to the bitcoin on par with the dollar that has been circulating in the country for a couple of decades.
Following the adoption of the cryptocurrency, President Bukele announced in November 2021 that Bitcoin City would be built in the east of the country, to be financed with the issuance of 1 billion dollars of cryptobonds, also known by the government as “volcano bonds”.
They were so named as the energy that will power Bitcoin City will be provided by geothermal energy from volcanoes.
The bill also provides for the creation of a National Commission for Digital Assets that will be in charge of implementing the regulations and developing the digital asset market in the country.
The deputy of the conservative and ruling Grand Alliance for National Unity (GANA) party, Romeo Auerbach, indicated that the law proposed by the government, if approved in the next weeks by the Congress, will allow “enabling the launching of the volcano bonds”.
So far Bukele’s government has purchased 2,381 bitcoins, allocating $107 million of public funds to these operations.
However, last week Bukele announced that he will buy a bitcoin every day, without specifying for how long he will do so, at a time when the bitcoin suffers a fall in value.