The Congress of El Salvador approved a controversial law that regulates emissions with cryptocurrencies

The Congress of El Salvador approved the Digital Assets Law to regulate emissions with cryptocurrencies. (EFE)

The Legislative Assembly of El Salvador approved this Wednesday a digital assets law that seeks to provide a legal basis for transfers or issuances of debt with cryptocurrencies.

The Digital Securities Law, which obtained 62 votes in the 84-seat Congress, was approved after El Salvador became the first country in September 2021 to adopt bitcoin as legal tender on par with the dollar, which circulates since 2001.

For the opposition deputies, the regulations facilitate money laundering, tax evasion and greater indebtedness for the government of Nayib Bukele.

“For me, this law, due to the way it was approved, could be about the creation of a kind of ecosystem for money laundering and tax evasion, because by introducing regulatory elements for digital assets without talking about reforms to the money laundering law of money, without reforms to the prosecutor’s law, we are creating a new concept with a parallel to the superintendency of the financial system,” said opposition legislator Johnny Wright Sol, according to statements collected by the El Salvador portal.

According to the aforementioned outlet, during the discussion of the initiative, the Vamos deputy, Claudia Ortiz, proposed to modify two articles so that the issuance of digital assets carried out by the State and other public institutions, first go through authorization from the Legislative Assembly. However, the proposal was not supported by the ruling party.

The law also creates the National Digital Assets Commission, which will be in charge of applying the regulations and developing the digital asset market in the country. (AP)

“The Legislative Assembly of El Salvador has just approved, by an overwhelming majority, the new Digital Securities Law. Forward, always forward,” President Nayib Bukele wrote on Twitter in English.

The text stipulates that “El Salvador must adopt innovative measures that allow it to compete for the attraction of foreign direct investment from important technology companies worldwide.”

The new legislation creates the Bitcoin Fund Administration Agency (AAB) as a public law institution that may establish offices anywhere in the country and abroad.

In addition, the AAB “will safeguard the funds from public offerings made by the State of El Salvador or any of its autonomous institutions.”

The law establishes that “a digital asset is a digital representation that can be stored and transferred electronically” through records “linked and encrypted to protect security and privacy.”

For the opposition deputies, the regulations facilitate money laundering, tax evasion and greater indebtedness for the government of Nayib Bukele. (EFE)

According to the ruling party, the new legislation opens the way to the acquisition of 1,000 million dollars in crypto bonds or “volcano bonds”. In November 2021, Bukele announced that he would build a “Bitcoin City” in the eastern department of La Unión, which would be powered by geothermal energy from a volcano in the area.

The law also creates the National Digital Assets Commission, which will be in charge of applying the regulations and developing the digital asset market in the country.

The Bukele government has bought 2,381 bitcoins, allocating 107 million dollars to these operations.

On November 17, Bukele announced that he would buy a bitcoin every day, without specifying for how long, at a time when the price of the cryptocurrency is below $20,000, after reaching $68,000 in November 2021.

(With information from AFP and El Salvador)

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