Global: El Salvador Forges Ahead with Crypto Regulation

El Salvador Forges Ahead With Crypto Regulation
3d rendering of two bitcoins in front of a Salvadoran flag
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Legislators in El Salvador are considering a bill that would regulate digital securities, a sign the Central American nation is proceeding with plans to issue bonds backed by bitcoin even as citizens turn away from the country’s crypto experiment.

That’s according to a report Wednesday (Nov. 23, 2022) by CoinDesk, which said it had seen a copy of the proposal.

Presented by El Salvador’s Minister of Economy Maria Luisa Hayem Brev to the country’s legislative assembly, the bill aims to create a National Digital Assets Commission that would regulate digital asset issuers, service providers, and other players in the “public offering process” of digital securities.

Last year, El Salvador became the world’s first nation to make bitcoin legal tender. But as PYMNTS reported last month, many of its residents don’t consider the experiment a success.

Two-thirds of Salvadorans call President Nayib Bukele’s bitcoin policy a failure and more than 75% have never used it, German public news outlet Deutsche Welle reported in October.

Under 17% said they consider the initiative a success, a survey by the University Institute of Public Opinion of the Jesuit Central American University found. That makes it “the most unpopular measure of the Nayib Bukele government,” said University Rector Andreu said.

Nevertheless, Bukele remains Latin America’s most popular leader, with an 86% approval rating, CID Gallup said.

Earlier this month, PYMNTS reported that the watchdog group Anti-Corruption Legal Advisory Center (ALAC) criticized El Salvador’s development bank for refusing to release details about the country’s purchase of bitcoins for an estimated $107 million.

ALAC said on Twitter in late October that development bank BANDESAL has said that the information is “confidential,” backing up previous refusals by Bukele.

BANDESAL handles El Salvador’s bitcoin purchases from a $150 million fund.

“That confidentiality limits the possibility for citizens to access and receive information on the operations carried out with public funds” by the agency, ALAC said, criticizing the decision.

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