Crypto

El Salvador moves forward with bill to regulate Bitcoin title

Lawmakers in El Salvador are soon to tackle a new bill aimed at regulating digital government bonds, indicating the country is moving forward with plans to issue Bitcoin (BTC)-backed bonds.

Presented by the country’s economy minister, Maria Luisa Hayem Brief, to the Legislative Assembly of El Salvador, the bill seeks to establish a National Digital Assets Commission that would oversee the regulation of digital asset issuers, service providers and other participants involved in the “public offering process” of digital securities, according to a 33-page document reviewed by CoinDesk.

In 2021, under the leadership of President Nayib Bukele, the Central American country became the first in the world to make Bitcoin a legal tender. In addition to buying Bitcoin during price drops and openly fighting with the International Monetary Fund (IMF), which warns that the country must reverse its decision to refinance its external debt, Bukele reinforced the dispute by revealing plans to raise US$ 1 billion through Bitcoin-backed securities.

The issuance of El Salvador’s Bitcoin bonds, initially scheduled for March this year, was delayed after the cryptocurrency plummeted by more than 70%. The country’s finance minister, Alejandro Zelaya, however, blamed the war in Ukraine.

The new rules, if approved, determine the creation of a Bitcoin Fund Management Agency responsible for managing, safeguarding and investing “funds from public offerings of digital assets carried out by the State of El Salvador and its autonomous institutions”, as well as any returns from these public offers.

El Salvador’s Congress must pass this legislation before the title is issued, and President Bukele’s New Ideas party has a majority in Congress. The document was received by the government’s legislative group on November 17.

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