El Salvador has announced a new law that will place crypto regulation duties in the hands of both state and private entities. The idea is that these entities will hold sway over any digital currencies (except for bitcoin, which has already been declared legal tender in the country) and how they are issued within the borders of the Central American nation.
El Salvador Is Working Its Way Up the Crypto Regulation Ladder
The goal of the bill is to potentially attract outside investors and get them to place their money into the region’s economy and infrastructure. The law will also allegedly create new financial opportunities for current residents and companies that call El Salvador home.
Of the 84 seats in El Salvador’s Congress, approximately 62 voted in favor of the law. The newly drafted bill reads as follows:
The purpose of this law is to establish the legal framework that grants legal certainty to transfer operations to any title of digital assets used in public issuance offers.
The new law also establishes a new agency designed for monitoring crypto activity. Known as the National Commission for Digital Assets and the Bitcoin Funds Administration Agency, the organization will be tasked with managing, safeguarding, and investing assorted funds from public offerings of digital currencies hosted by government officials.
These public offerings can occur with virtually any digital asset so long as it doesn’t qualify as a central bank-issued token of another region. In addition, they cannot include bitcoin – which has been declared functional money by the state – or non-fungible tokens (NFTs).
El Salvador has made massive headway over the past few years in the crypto arena. The country was the first to declare bitcoin legal tender, doing so in September of 2021. This meant that all businesses within its borders were required by law to accept bitcoin as a method of payment for goods and services. Up to that point, the nation had largely been dependent on USD to get its financial operations in line.
The process did not come without its hiccups. The World Bank announced that it would not provide any aid to El Salvador’s government as it worked to implement its bitcoin agenda. The reason for this was because BTC and crypto were allegedly too volatile and speculative to be taken seriously.
Several Problems Thanks to BTC
In addition, the country faced protests from its own people, who didn’t like the idea of bitcoin being “forced” upon them. Many residents were happy with utilizing USD for purchases, and thus didn’t see the necessity of bitcoin.
At the time of writing, El Salvador is in serious debt thanks to its ongoing crypto purchases. Despite the massive price dips endured by the world’s number one form of digital currency, the country has made a vow to purchase at least one BTC unit per day.
