Robert Steinadler, 17 days ago

El Salvador: New crypto friendly law is in the making

El Salvador is the most crypto friendly place in the world. The country adopted Bitcoin (BTC) as legal tender in September 2021 and is therefore a pioneer when it comes down to overall crypto adoption. Ever since El Salvador is making big plans, with a dedicated Bitcoin City and a hub for the mining industry with cheap and green energy sources.

What is the most recent move in terms of laws and regulations and how will crypto benefit from it?

Digital asset markets in the making

The proposed law would make it a lot easier to settle the transfer of digital assets from a legal perspective by creating the foundation for a digital asset market. Such as a registry for digital asset providers, the legalization of other cryptos than Bitcoin along with the necessary legal definition of those assets.

A whole list of different assets could benefit from these changes starting with utility tokens and stablecoins up to security tokens. The framework is also meant to regulate how digital assets can be part of a public offering.

Thera are even plans on the table to offer tax exemptions in some cases. Critics claim that the new law would only benefit companies from overseas rather than creating opportunities for Salvadorans. While the Bitcoin adoption did not turn out as fruitful as promised, it drove more revenue to the small country through tourism and investments from crypto native businesses.

From Bitcoin to Crypto

Many Bitcoin proponents have pointed out that the recent struggle that the market is going through is not part of Bitcoins ecosystem, but that of the crypto industry that enabled companies to act with too much leverage.

While it is true that certain centralized players are to blame for this situation, crypto and its technology has still intrinsic value to offer. Many experts demand more regulatory clarity to prevent history from repeating itself. The EU is finalizing MiCA that will soon unify regulation on the European market. The US on the other hand is still assessing of how to regulate the market specifically.

El Salvador’s move to create a new law that take crypto into account is exactly what is needed to create a safe environment that allows innovation to thrive. It is not only about token sales. Think about all the possibilities with tokenized stocks and bonds. One of these bonds is the so-called “Volcano Bond” that is meant to finance the Bitcoin City. The new law will also benefit this project which got stuck for quite some time after being announced last year.

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