• El Salvador’s legislative assembly has passed a landmark law to establish a legal framework for digital assets, paving the way for the proposed Volcano Bonds.
• The law also establishes a National Digital Assets Commission to oversee the issuance of digital assets.
• The bond issuance was initially planned for March 2022 but was delayed due to the crypto winter.
The legislative assembly of El Salvador has recently passed a landmark law to establish a legal framework for digital assets. This groundbreaking legislation sets the stage for President Nayib Bukele’s proposed Volcano Bonds, a plan that he announced in 2022. This new law not only gives the green light to the issuance of these bonds, but it also creates a National Digital Assets Commission to oversee the process.
This initiative was first proposed by President Bukele in 2021, with the goal of issuing $1 billion in Bitcoin-backed bonds to fund the construction of a “Bitcoin City” at the base of the Colchagua volcano. The city would be powered by the volcano’s hydrothermal energy, and it was from this source that the bonds derived their name. In November 2022, a digital securities bill urging El Salvador’s lawmakers to create a legal framework surrounding the planned issuance of digital assets by the country was introduced in the legislative assembly.
The passing of this key legislation brings El Salvador one step closer to the issuance of these bonds. The bond issuance was initially planned for March 2022, but was delayed due to the crypto winter. The National Digital Assets Commission, created under the new legislation, will be responsible for establishing the necessary rules and regulations to ensure the successful issuance of these bonds.
The decision to pass this legislation is a major milestone in El Salvador’s journey towards becoming a crypto-friendly nation. President Bukele’s administration has been a strong proponent of digital assets and blockchain technology, and this move further cements the country’s commitment to the industry. With the legal framework now in place, it’s only a matter of time before the citizens of El Salvador witness the launch of the Volcano Bonds.