El Salvador Proposes Digital Securities Bill, Paves Way for Bitcoin Bonds

El Salvador's bitcoin-backed "volcano bonds" are expected to raise $1 billion for the government.

AccessTimeIconNov 23, 2022 at 11:46 a.m. UTC
Updated Nov 23, 2022 at 3:29 p.m. UTC
Drive the Crypto Policy Conversation Forward
October 24, 2023 • Convene • Washington D.C.Where the industry establishes the digital economy’s legal, regulatory and compliance best practices for the future.Register Now

El Salvador's national assembly is considering a draft bill to regulate digital securities, indicating the country is going ahead with plans to issue bitcoin-backed bonds.

The bill, presented by the country's Minister of Economy Maria Luisa Hayem Breve, to the Legislative Assembly of El Salvador. The bill seeks to establish a National Digital Assets Commission that would oversee the regulation of digital asset issuers, service providers and other participants involved in the "public offering process" of digital securities according to the 33-page document reviewed by CoinDesk.

In 2021, under the leadership of President Nayib Bukele, the Central American nation became the first in the world to make the popular cryptocurrency bitcoin legal tender. Apart from buying up bitcoin during price dips and openly sparring with the International Monetary Fund as it warned the nation to reverse its decision, Bukele doubled down on the controversial move by revealing plans to raise $1 billion via bitcoin-backed bonds.

The issuance of El Salvador's "volcano bonds," initially planned for March, was delayed with the country's Finance Minister Alejandro Zelaya blaming the war between Ukraine and Russia.

The new rules, if passed into law, mandates the creation of a Bitcoin Fund Management Agency responsible for administering, safeguarding and investing "funds from public offerings of digital assets carried out by the State of El Salvador and its autonomous institutions" as well as any returns from these public offerings.

El Salvador's Congress must pass this legislation ahead of the issuance of the bond and President Bukele's New Ideas party has a majority in the legislature. The document was received by the legislative arm of the government on Nov. 17.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Sandali Handagama

Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She does not own any crypto.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.