El Salvador Edges Closer to Issuing Its Bitcoin Bond, Plans to Legalise All Crypto Assets
El Salvador is a step closer to issuing its Bitcoin Bond as President Nayib Bukele’s administration has released a digital securities bill for the bond to lawmakers. The volcanic nation also plans to legalise all crypto assets under the new law.
El Salvador Releases Bill for Issuing Bitcoin Bond
According to Bloomberg, a copy of the 33-page-long document was released on Tuesday by a spokesperson for the president’s office. The bill requests a digital assets commission and Bitcoin Fund Management Agency to oversee crypto-related debt sales.
Recall that the issuance of the Bitcoin Bond was delayed in August. Crypto Saving Expert reported that Paolo Ardoino, the CTO of crypto trading platform Bitfinex, the official exchange of the bond, said that the offering would be delayed until late 2022.
The recent development shows that El Salvador is closer to issuing the bonds, despite critics’ belief that such is unlikely to happen.
Upon issuance, interested parties could invest as low as $100. The Bitcoin Bond will be issued to raise $1 billion to finance the development of the nation’s income tax-free Bitcoin City, which would use geothermal energy from a nearby volcano for mining crypto assets.
The $1 billion raised would be split into two parts — $500 million for financing infrastructure in the Bitcoin City and the other half for purchasing additional Bitcoin, with profit from the appreciation of the digital asset shared with bondholders.
El Salvador currently has over 2,300 BTC reserves, and the country recently vowed to purchase 1 BTC daily amid the bear market.
El Salvador to Legalise All Crypto Assets
The document also showed that El Salvador intends to create custom legal guidelines for all other crypto assets just as it legalised Bitcoin last year. The draft law separates crypto assets from other financial assets and products, thus requiring a tailored regulatory framework.
A section of the document says the goal is to “create a legal framework to transfer digital assets that are used in public issuances in El Salvador, as well as regulate the requirements and obligations of issuers and providers of digital assets.”
While analysing the bill, crypto lawyer Ana Ojeda Caracas highlighted some of the notable features of the new law. Some of them include the creation of a registry for digital assets firms, the legalisation of crypto assets, the legal definition of stablecoins and tokens, regulations of public offerings of crypto assets, and tax exemption in some cases.
~ By William A. Frederick ~