The legislative assembly of El Salvador recently approved a digital securities bill, which reportedly allows for the issuing of Bitcoin bonds.
The proposed bill establishes the legal foundation for Bitcoin-backed bonds, the “Volcano Bonds,” which El Salvador intends to utilize to settle its debt obligations and finance the building of the Bitcoin City project.
Also Read: El Salvador to Build Bitcoin City Backed by $1B Bitcoin Bond
El Salvador planned to issue $1 billion in bonds under the November 2021 plan on Blockstream’s Liquid Network, a federated Bitcoin sidechain. $500 million of the $1B is set to build the city’s energy and mining infrastructure, and the rest of the funds are to be invested in Bitcoin.
El Salvador’s Bitcoin Office stated, “With the passing of this digital securities law, El Salvador will offer unprecedented consumer protection from bad actors in the ‘crypto’ space while also firmly establishing that we are open for business to all those who wish to build the future with us on bitcoin.”
The bill was presented to the country’s legislative assembly by Maria Luisa Hayem Brevé, El Salvador’s Minister of the Economy. Following President Nayib Bukele’s confirmation, the bill will become law as it received 62 votes in favor and 16 votes against it at the assembly.
The bill segregates cryptocurrencies from all other assets and financial products, including CBDCs. It also distinguishes Bitcoin from the rest of the cryptocurrency market by designating them as digital securities.
The new legislation also establishes the National Digital Assets Commission, a regulatory body tasked with upholding El Salvador’s securities laws, defending the rights of buyers and issuers of digital assets, and discouraging fraudsters from conducting business there.
The Bitcoin Office noted “El Salvador is the epicenter of Bitcoin adoption, and thus, economic freedom, financial sovereignty, censorship resistance & unconfiscatable wealth. When we issue the first of the volcano bonds, we will once again be blazing the path forward for this new monetary revolution.”
