El Salvador approved yesterday the Digital Securities Law that would allow the country to finance itself through the first bitcoin sovereign bond in the world. The law was approved with 62 votes in favor and 16 votes against. The country’s president, Nayib Bukele, and the National Bitcoin Office reported on their respective Twitter accounts the approval of historic legislation that paves the way for Volcano bonds, which will soon begin to be issued. Forward, always forward… President Bukele tweeted.
In addition to the announcement of the approval, the ruler shared a link from the National Bitcoin Office (@bitcoinofficesv), which explained the importance and scope of the regulation, which did not have the support of ARENA, FMLN, VAMOS, or Nuestro Tiempo.
«El Salvador is the first to pass landmark legislation establishing a legal framework for all non-bitcoin digital assets. As well as those issued in bitcoin. The law also paves the way for Volcano Bonds that we will soon start issuing,» the National Bitcoin Office reported.
Earlier, the president indicated that the tokenized bonds would be worth $1 billion and would be used to finance the creation of the world’s first «Bitcoin City,» which he compared to the cities founded by Alexander the Great. The city will be built near the Conchagua volcano and have residences, shops, services, museums, a port, and an airport. The country reported that 500 million would be used to finance Bitcoin City and the remaining 500 million would be used to purchase more bitcoins.
The legislation approved yesterday, which consists of 47 articles, is applicable to public offerings of digital assets in Salvadoran territory, as well as to issuers and providers of digital asset services and other participants in public offerings.
In addition, it creates a National Digital Assets Commission, which will have among its powers the promotion of the digital asset market and will be in charge of managing the registry of service providers of those assets.
For its part, the Bitcoin Funds Administrator agency, which is created by law, will be in charge of the administration, safekeeping, and investment of funds from public offerings of digital assets made by the Salvadoran State and the returns that come from those public offerings.
The legislation establishes that its provisions do not apply to digital currencies issued by the central banks of any country or to digital assets that cannot be traded or exchanged, among others.