El salvador legislative assembly recently approved a digital assets law with 62 votes for and 16 against. the law is meant to create legal protection for transfers or issuances of debt with cryptocurrencies, and provide a legal framework for bitcoin-backed bonds, also known as the “volcano bonds”. president nayib bukele expressed his support on twitter.
New legislation was approved on june 10th, 2021 in el salvador. it creates the national digital assets commission to regulate the security law and protect digital asset purchasers and issuers. the commission will also deter fraudsters operating in the country.
New bill separates cryptocurrencies from other assets, including cbdcs, and identifies bitcoin as digital securities. this bill is seen as a major step toward creating a better future with the use of bitcoin in el salvador. the project is a tax-free enclave for bitcoin advocates in the east of the country powered by geothermal energy from nearby volcanoes. president bukele has announced that the government will buy one bitcoin per day, and has tabled a project to issue $1 billion in bitcoin bonds. the volcano bonds, which will be denominated in u.s. dollars and pay 6.5% annually for 10 years with a five-year lock-up period, are expected to fast track investors to land citizenship in the country. the project has repeatedly been postponed due to crashing markets. with the passing of the new bill, el salvador is now within reach of finally kickstarting the project, with onbtc saying the issuance of the volcano bonds “will soon begin.”