Crypto

Crypto heaven? El Salvador is preparing a new law to pave the way for all cryptos – Decipher

El Salvador is doubling down on its cryptocurrency bet even in the midst of a bear market. The first country to declare Bitcoin as legal tender is currently working on a law on the issuance of digital assets, which would facilitate transactions with any crypto asset.

According to a document available on the official website of the National Assembly of El Salvador, the law would regulate transfer operations of any digital asset, seeking to “promote the efficient development of the digital asset market and protect the interests of acquirers”.

The novelty of the law is that it separates crypto assets from all other financial assets and products, creating a tailor-made regulatory framework for them. The law leaves no room for doubt: for a digital asset to fall under this categorization, it must use distributed ledger or similar technology. Blockchain is perhaps the most popular distributed ledger technology to date.

The framework of the law excludes transactions with CBDCs (as they are regulated in fiat currency according to the financial guidelines of each country), assets not eligible for trading or exchange, assets with restricted transactions such as securities and sovereign assets regulated by foreign laws.

In a Twitter threadCryptocurrency lawyer Ana Ojeda Caracas highlighted some of the more interesting features of the law:

  • Creation of a register of digital suppliers.
  • Legalization of cryptos.
  • Inclusion of a legal definition of stablecoins and tokens.
  • Regulation of public offerings of digital assets.
  • Tax exemption in certain cases.

Critics of the new law were not long in coming. Mario Gomez, a Salvadoran hacktivist with a strong critical stance on how President Nayib Bukele implemented the Bitcoin Law, claimed the new law was created as a way to benefit struggling foreign companies, seeking to increase the attractiveness of El Salvador as a haven for the crypto industry. “The reason these companies focus on smaller countries is because it’s easier to sit directly with a president being a big company and put in place measures that benefit (them)” , he assured in a Twitter space analyzing the question.

President Bukele presented the famous Bitcoin law to Congress in June 2021. A few hours later, it had already been approved by the National Assembly with a large majority of the pro-government party. If so, the new law will likely come into effect in the same hasty manner.

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