Digital Assets El Salvador New Law

LEGISLATIVE ASSEMBLY
Read in the Legislative Plenary on:
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LEGISLATIVE ASSEMBLY

Legislative Operations Management
Official Correspondence

San Salvador, November 14, 2022.

Secretaries of the
Honorable Legislative Assembly,
Present.

Secretaries:

Complying with special instructions from the President of the Republic, I allow myself
present to that Honorable Legislative Assembly, through your dignified means, with
based on what is established in the second ordinal of article 133 of the Constitution of the
Republic, having granted the Law Initiative to the Legislative Decree project
that contains the "Law on the Issuance of Digital Assets", the purpose of which is to establish
the legal framework that grants legal certainty to transfer operations to any
title of digital assets that are used in the issuance of public offerings carried out
in the territory of El Salvador; as well as regulate the requirements and obligations of the
issuers, digital asset service providers and other participants that
operate in the process of public offerings, with the objective of promoting the development
efficient market for digital assets and protect the interests of acquirers.

Based on the proposed objective, I respectfully request that the Honorable
Legislative Assembly is aware of such a project; Because of this, I request that you enter the
this piece of correspondence that includes said project, in order to comply
with the formality of the law formation process, all with the intention that the same
be approved in a timely manner according to law.

GOD UNION LIBERTY

v

Signature:

 LEGAL SECRETARY OF THE PRESIDENCY
Salvador, November 15, 2022.
MINISTER:

With the corresponding INITIATIVE OF LAW granted by the President of
the Republic, based on the provisions of article 133, second ordinal of the
Constitution of the Republic, I respectfully send you the Draft Legislative Decree
that contains the "Law on the Issuance of Digital Assets", the purpose of which is to establish
the legal framework that grants legal certainty to transfer operations to any
title of digital assets that are used in the issuance of public offerings carried out
in the territory of El Salvador; as well as regulate the requirements and obligations of the
issuers, digital asset service providers and other participants that
operate in the process of public offerings, with the objective of promoting the development
efficient market for digital assets and protect the interests of acquirers; in
Consequently, you can present it to the Legislative Branch, in order to manage your

timely approval.

GOD UNION LIBERTY

Legal Secretary of the Presidency.

LICENSED

MARIA LUISA HAYEM BREVE
ECONOMY MINISTER
ESDO

 DECREE No.-

THE LEGISLATIVE ASSEMBLY OF THE REPUBLIC OF EL SALVADOR.

CONSIDERING:

IL.

SAW.

That Article 101 of the Constitution states that the State will promote the development
economic and social by increasing production, productivity and
the rational use of resources, and in addition, it will encourage the various sectors
industry, commerce and services; and therefore, it must harmonize the laws
existing with the most relevant changes in the global economy;

That in accordance with article 102 of the Constitution of the Republic, the
The State is under the obligation to promote and protect private initiative,
generating the necessary conditions to increase national wealth in
benefit of the greatest number of inhabitants;

That the global economic environment is increasingly interrelated
and more digitized; and as a consequence, El Salvador must adopt measures
innovative that allow it to compete for the attraction of foreign investment
direct from major technology companies worldwide;

That in view of the fact that the Legislative Assembly approved on June 9, 2021
the Bitcoin Law, thereby legalizing said digital assets in the country and
whereas this has created an important new sector in our
economy, it is crucial to create mechanisms that allow entities in the sector
public and private can carry out issuances of public offerings of assets
digital;

That in view of the fact that the financing market through digital assets has
had a very significant increase in recent years, it is crucial
establish regulatory frameworks that regulate such emissions in the country;

That because the digital asset market has grown rapidly
over the last twelve years, it is essential to allow the State, the
autonomous institutions, the Central Reserve Bank and the private sector can
finance themselves in this new market;
VII. That since public offerings generally seek to be financed with
resources of the public in general, clear legal norms must be established
that protect the interest of investors;

VIII. That in order to meet the above considerations, it is essential to issue
rules that regulate the issuance of public offerings of digital assets, as well as
the provision of digital asset services.

SO,

in use of its constitutional powers and at the initiative of the President of the Republic
through the Minister of Economy,

DECREES the following:

Digital Assets Issuance Law
Chapter |
General features

Object of the Law

Art. 1.- The purpose of this Law is to establish the legal framework that grants certainty
transfer operations to any title of digital assets that are
used in the issuance of public offers carried out in the territory of El Salvador; So
how to regulate the requirements and obligations of issuers, service providers of
digital assets, and other participants that operate in the process of public offerings,
with the aim of promoting the efficient development of the digital asset market and
protect the interests of buyers.

Area of application

Art. 2.- This Law is applicable to public offerings of digital assets in the
territory of El Salvador, as well as to issuers and service providers of assets
digital and other participants in public offerings.

digital asset

Art. 3.- A digital asset is a digital representation that can be stored and
be transferred electronically, using a System of Registration Technology
Distributed, or similar or analogous technology, in which records are located
linked and encrypted to protect the security and privacy of transactions.
As an essential feature, digital assets can be owned, traded,

transferred, negotiated and promoted by natural and legal persons.

Digital assets are not considered securities and therefore will not be applicable

in any respect the provisions referring to securities, contained in the

Commercial Code, nor those established in the Securities Market Law, in the

Law of Electronic Securities, in the Law of Electronic Annotations of Securities in

Account or in the Investment Law.

exclusions

Article 4.-

a)

b)

d)

The provisions of this Law are not applicable to:
Digital currencies issued by the central banks of any country,
jurisdiction or territory;
Digital assets that by a law before or after this are
legal tender in any country, territory or jurisdiction, as to its
monetary regulation, and when the use is for the exchange of goods and
services, except for goods categorized as digital assets and
services established in articles 19 and 26 of this Law;
Digital assets that can only be exchanged for a good or
service that is provided by the issuer of that digital asset or by a number
limited number of providers of that good or service; Y,
Digital assets that cannot be traded or exchanged.

Definitions

Art. 5.- For the purposes of this Law, the terms detailed below

will have the following definitions:

a)

b)

Reference asset: It is an asset that serves as a base or reference to determine
the price or value of a digital asset, such as fiat money, assets
intangibles or stablecoins;

Digital Wallet: It is an electronic device or a mobile application that allows
transact by exchanging units of digital assets and
of scriptural money and which is also known as "electronic wallet" in the
English language;
 9)

d)

1)

Certifier: Legal entity that performs a financial, legal, technical and
administration of material and relevant information on public offerings
contained in the Relevant Information Document, and issues and presents a
report on compliance with formal and substantive obligations by
part of the issuer before the National Commission of Digital Assets;

Smart Contract: It is a computer program, which uses the Technology of
Distributed Registry or a similar or analogous one, and that is implemented when certain
predetermined conditions are met; and is typically used for
automate the execution of a deal so that all participants can
be certain of the result, without the need for an intermediary. According to him
agreement between the parties, said programs can be self-executing,
judicially executed or executed in a combined manner;

Stable Currency: It is a type of digital asset designed to minimize volatility
of its price and that refers to, represents or is backed by an asset or
basket of assets;

Derivative Digital Asset: It is a type of contract that uses a digital asset as
its underlying digital asset or that is paid for in digital assets, such as
futures contracts, options and swaps;

Underlying Digital Asset: It is a digital asset that serves as a base or reference for
determine the price or value of a derivative digital asset;

Scriptural money: It is a type of money represented by annotations
accounting, usually held in bank deposit accounts;
Relevant Information Document: It is a document that informs the public
in general of the most relevant aspects of any public offering of assets
digital, such as the clear identification of the issuer, the characteristics and the
issuance goals. Said document must identify whether the interests,
profits, revenues or returns from the public offering will be paid with money
written or in digital assets;

Issuer: Refers to the State or a person, natural or legal, private or public
that makes or promotes an offer to the public of digital assets or that seeks the
admission of a digital asset for the purpose of selling or trading it in a
exchange or negotiation platform, centralized or decentralized, whether or not
not regulated, and that meets one or more of the following three conditions:

1) Is domiciled in El Salvador;
2) It is not domiciled in El Salvador but uses a platform of
exchange or negotiation that is domiciled in the country;
 K)

3) It is not domiciled in El Salvador, but its purpose is to promote or
make a public offering that provides digital assets to potential
acquirers in El Salvador, except in the case in which the potential
acquirers initiate, on their own account, the commercial relationship with the
provider of said digital assets.

A digital asset service provider that supports the trading of
digital assets on your trading platform is not, by the mere fact of
accept such trading on your platform, an issuer.

Public Offer of Digital Assets: It is a technical or commercial proposal
carried out to the general public, massively, and with the aim of
trade or sell digital assets;

Public Offering of Debt: It is a type of public offering of digital assets that
which establish a credit from the issuing entity or from another entity in favor of the
acquirer;

m) Public Property Offer: It is a type of public offer of digital assets that

1")

q)

which establish a property right in favor of the acquirer in the entity
issuer or in another entity;

Public Offering of Income: It is a type of public offering of digital assets that
which establish a right of the purchaser to receive income or money flows
fiduciary or digital assets of any nature, including earnings,
profits or distribution of yields;

Funds: These are the economic resources obtained from bills and coins,
scriptural money, electronic money and digital assets;

Market Integrity: It is fair, efficient and transparent access to a market
for information on prices, marketing practices and
information disclosure standards;

LRU or Uniform Resource Locator (better known by the acronym URL, from
English Uniform Resource Locator): It is a string of characters with which
assigns a unique address to each of the available information resources
In Internet;
 t)

Primary Market: It is a market in which issuers and acquirers participate.
through a centralized or decentralized trading platform
of public offerings than of digital assets, regulated or not, in the purchase and
sale of such digital assets when they are first offered to the public;

Secondary Market: It is a market in which digital assets are
negotiated a second or more times by the acquirers or their representatives,
without the intervention of the issuers;

Node: It is a point of intersection, union or connection in a real or abstract way.
where several elements that communicate with each other meet, and that contain
a script which contributes to the script
general of a digital or computer system;

Digital Platforms: These are digital infrastructures that allow two or more
acquirers interact and exchange digital assets for other assets
digital or fiat money;

Digital Assets Service Provider: It is a natural or legal person whose
Ordinary business involves providing one or more of the digital asset services that
detailed in article 19 of this Law, and that complies with one of the following
two conditions:
1) Is domiciled in El Salvador;
2) It is not domiciled in El Salvador, but promotes or sells
actively services potential clients in the country.

w) Digital Asset Services: Refers to the services detailed in article 19

x)

Y)

of this Law;

Rules for Public Offerings of Digital Assets: Refers to the laws,
regulations, instructions, technical standards, guides, and any regulations
issued by the competent authority that is used for public offerings of
digital assets;

Distributed Registry Technology: It is a database system in which the
information is recorded, shared and synchronized in a consensual manner in a network
multi-node and where most copies of the databases are
consider equally authentic;
 z) Token: It is a digital asset that is used as a unit of account in a network,
based on the Distributed Registry Technology or a similar or analogous one;

The regulations of this Law may develop additional terms for the best
functioning of the digital asset market.

Chapter II
From the National Commission of Digital Assets

Creation and Domicile

Art. 6.- Create the National Digital Assets Commission, which in the text of this Law
may be called "The Commission", as a public law institution with
legal personality and own patrimony, of a technical nature, with autonomy
economic, financial and administrative, for the exercise of the powers and duties that
stipulated in this Law and in the rest of the applicable common legislation.

The National Commission of Digital Assets will relate to the Executive Branch through
of the Ministry of Economy.

The Commission will be domiciled in the city of San Salvador and will be empowered to
establish offices anywhere in the national territory and abroad.

Competent Body

Art. 7.- The National Commission of Digital Assets is in charge of the application of the
regulations described in this Law, its regulations and other rules of offers
public of digital assets.

The Commission in its actions related to public offerings of digital assets
must weigh the rights of the acquirers of digital assets and the public in
general, the promotion of innovation and competitiveness.

Protection of Acquirers of Digital Assets

Art. 8.- The National Digital Assets Commission will verify that the issuance of offers
of digital assets are carried out in accordance with the applicable obligations,
ensuring the integrity of the market and the provision of adequate information to the
acquirers.
 Powers of the National Digital Assets Commission

Article 9.-

a)

b)

d)

The Commission shall have the following powers:
Foster and strengthen favorable conditions for the development of the market for
digital assets in El Salvador;
Resolve on the authorization of public offers and any other request that is
present before the Commission; and authorize, suspend or cancel public offers that
violate provisions of this Law and its regulations;
Manage and constantly update the Issuer Registries,
Certifiers, Service Providers of Digital Assets and Offers
Public than digital assets;
Authorize, suspend, revoke and cancel the registration of the Providers of
Digital Asset Services, in accordance with the provisions of this Law and its
regulations, as well as suspend negotiations and operations of assets
digital;
Establish safeguard mechanisms for digital assets issued in the
public offerings;
Authorize, suspend, revoke and cancel the registration of certifiers;
Register and unregister the issuers in the respective registry;
In the event of non-compliance due to any issuer, it may suspend the sale
or commercialization of the digital assets of said issuer;
Establish standards of good business conduct and ethical standards that must be
follow digital asset service providers, violations of which could
imply sanctions;
Certify the Relevant Information Documents in case they do not exist
authorized certifying entities;
Examine, monitor and supervise the activities of the Service Providers of
Digital Assets and any other entity subject to the supervision of this Commission;
Ensure that Digital Asset Service Providers, Certifiers,
Issuers and Acquirers comply with this Law and its regulations;

m) Carry out inspections, proceedings and investigations established in the

n)
0)

pp)

regulations of this Law;

Impose the sanctions established by this Law;

Dictate technical norms and standards, as well as guides and instructions, applicable to
this Law and its regulations;

Issue, amend and revoke agreements, guides and instructions regarding the application
of this Law and its regulations;
 q)

Issue guidelines and technical regulations applicable to stablecoins,
including proof of funds or support of the value of said coins, as well as
all relevant documentation that the issuers of said digital assets
they must submit to the Commission to make public offers;

Settle consensual agreements between the subjects in accordance with the scope of this Law,
when there is a risk to the integrity of the digital asset market;

Acquire and dispose, under any title and in accordance with the applicable regulations,
of the goods and services necessary for the fulfillment of its objectives;

Dictate its internal regulations and establish its organizational structure;

Charge fees for records from Digital Asset Service Providers
and Certifiers, as well as for their administration and issuance of certifications
respective;

Carry out the collection of fees for the authorization of public offers and
certifications established in this Law.

Organization and Operation
Art. 10.- The highest authority of the Commission will be the Board of Directors, which will be

integrated as follows:

a)

A designated full-time owner, who will be the President of the
Commission, and their respective substitute, appointed by the President of the
Republic.;

A designated full-time owner and his respective alternate,
appointed by the Secretariat of Commerce and Investments of the Republic;

A designated full-time owner and his respective alternate,
appointed by the Ministry of Economy.

Directors will be appointed for a period of five years.

It corresponds to the president of the Commission to exercise the legal, judicial and

extrajudicial.

The Board of Directors of the Commission, upon convocation by its President, will meet by

at least once a month.

To hold a session, the presence of the President or whoever acts as such will be necessary.

and that of all the proprietary members or their respective substitutes, when they make the

times of owners
 The resolutions or agreements of the Board of Directors of the Commission will be taken at least

with at least two favorable votes of the members present. When they do not replace a

titular member, alternate members of the Board of Directors, may attend their

sessions with voice but no vote.

Attributions of the Board of Directors
Art. 11.- The Board of Directors will have the following powers:

a)

b)

d)

Approve investment promotion strategies in digital assets, as
to government policies;

Approve and modify the work plans and financial programming of the
Commission;

Approve the draft budget for each fiscal year, according to
administration and operation of the Commission and salary regime, and send it to the
Ministry of Economy, to be incorporated into the budget of the Ministry of
Economy in an integral way;

Approve the organizational structure of the Commission for its operation and the
job description manual, considering the suitability for the exercise of
the functions;

Create advisory committees of digital asset advisors and trainers;
Authorize the contracting of the external audit;

Authorize the President of the Board of Directors to start negotiations
preliminary donations, according to the legal norm, to comply with the
purposes of the Commission;

Approve the amount of payments for services provided by the Commission;

Approve the Internal Work Regulations of the Commission, as well as other
applicable internal regulations;

Evaluate the results obtained and reorient the strategies, when necessary
necessary;

Celebrate acts, agreements and contracts with natural or legal persons, as well
as with public or private, national or foreign entities;

Incorporate anonymous, mixed-economy companies or any other
nature for making investments in favor of the Commission.

Issue special regulations of a technical and operational nature;

The others that are necessary for the fulfillment of the purposes of the Commission,
within the framework of this Law.

10
 Rates and Charges
Art. 12.- Fees for registration and administration services of the Registry of
Providers of Digital Assets Services, as well as for the authorization of offers

public, will be the following:

1) Digital Asset Service Providers, including Certifiers,

they must:

a)

b)

Pay, for a single time, an initial registration fee equivalent to fifteen
minimum wages in the trade and services sector;

Pay an annual registration renewal fee equivalent to ten salaries
lows in the trade and services sector during the first quarter of the
year;

Pay fifty United States of America dollars, or your
equivalent in bitcoin, for each certification of registration additional to the
original issued to them.

2) Issuers must:

a)

b)

Pay an amount equivalent to zero point zero one percent (0.01%) of the
amount of the public offer enabled at the time of receiving the authorization
for the requested issuance, as established in the Document of
Relevant information;

Pay fifty United States of America dollars, or your
equivalent in bitcoin, for each certification of the resolution issued by
issuance authorization.

In the case of stablecoin issuers, they must report
of the number of stablecoins they plan to issue over the next few years.
next twelve months and pay the corresponding rate for that amount. In
If the amount issued is greater than that projected at the end of the twelve
months, they will have to pay the corresponding fee for the stablecoins
that were not included in the initial projection.

The rates and charges established in this article are exempted from the State,

the Ministry of Finance, the Central Reserve Bank of El Salvador and
autonomous institutions.

eleven
 Additionally, the Commission may charge for services provided to the
digital asset service providers, issuers, certifiers, acquirers
and requesters of any type of information.

Chapter III
From the Bitcoin Fund Management Agency

Bitcoin Fund Management Agency

Art. 13.- The Bitcoin Funds Administration Agency is created, which in the text of this Law
may be called "AAB" or "The Agency", as a public law institution with
legal personality and own patrimony, of a technical nature, with autonomy
economic, financial and administrative, for the exercise of the powers and duties that
stipulated in this Law and in the rest of the applicable common legislation.

The AAB will relate to the Executive Branch through the Ministry of Economy.

The AAB will be domiciled in the city of San Salvador and will be empowered to
establish offices anywhere in the national territory and abroad.

Competent Body

Art. 14.- The Bitcoin Funds Administration Agency is in charge of the
administration, safekeeping and investment of: ¡) the funds from the offers
public than digital assets carried out by the State of El Salvador and its institutions
autonomous and ¡¡) the returns from said public offerings.

The AAB in its actions related to public offerings of digital assets
should prioritize investment in public works and projects.

Organization

Art. 15.- The AAB will be directed by an administrator appointed by the President of the
Republic for a period of five years and who will be responsible for exercising the
legal, judicial and extrajudicial representation of the Agency.

faculties
Art. 16.- The AAB will have the following faculties:
a) Manage and safeguard the funds of public offerings made by the State
of El Salvador or any of its autonomous institutions;
b) Diligently invest the funds from the public offerings that
carried out by the State or any of its autonomous institutions;

12
 Prioritize the investment of the funds it manages in public works and projects
that benefit the entire population;

Charge management fees for the funds it invests and manages
up to a maximum of zero point five percent;

Dictate its internal regulations and establish its organizational structure;

Supervise and control the entities where it has made investments;

Carry out direct contracts that it deems necessary to carry out its
operations, according to the procedure established in Chapter V, Title IV of the
Public Administration Procurement and Contracting Law;

Sign cooperation agreements with autonomous institutions and others
entities related to public offerings.

The AAB must open bank or cryptographic accounts in order to receive, safeguard,
store and disburse funds from public asset offerings
digital issued by the State or any of its autonomous institutions.

Obligations
Art. 17.- The AAB will have the following obligations:

a)

Act with transparency and honesty in the management of funds
administered;

Submit a quarterly public report on the management of funds
inverted;

Diligently evaluate the projects in which you plan to invest;

When investing in stock and debt securities, ensure that they present the
lowest possible risk;

Constantly analyze new investment opportunities for the funds
administered;

Any other obligation that the regulation of this Law establishes.

Chapter IV
Digital Asset Service Providers

Registry of Digital Assets Service Providers

Article 18.-

The Registry of Digital Assets Service Providers is created, hereinafter

called the Registry, which will be administered by the National Assets Commission

digital.

13
 For the registration of Digital Asset Service Providers, the following must be observed:

Next:

a)

b)

c)

d)

The Digital Asset Service Providers, regulated by this Law,
may only offer and provide digital asset services if they are
registered with the National Commission of Digital Assets of El Salvador;

A Digital Asset Service Provider that is offering digital asset services
digital assets prior to the entry into force of the regulation for the
Registry of Digital Assets Service Providers must be governed by the
established in article 45 of this Law.

Any natural person who wishes to register in the Registry referred to in this
article you must present your Unique Identity Document or resident card.
Additionally, you must indicate your place of residence in the country.

Any legal entity wishing to register in the Registry referred to in this
article must present its legal status. In case of people
foreign legal entities domiciled in another country, jurisdiction or territory, must
form a corporation or branch, domiciled in El Salvador and registered
duly at the National Records Center, and present the legal status
legal information of that company to the Commission.

All other aspects related to the organization and operation of the Registry,
including the procedures and formats to be used for the registration, modification or

deregistration, which must be integral and proportional to the nature, scale

and complexity of the services to be provided by the applicant, and the nature of the assets

digital and its derivatives, will be developed in the respective regulation, established by

this law.

Digital Asset Services
Art. 19.- The providers of digital asset services may carry out the following
activities:

a)

b)

Exchange of digital assets for fiat money or equivalent or for other
digital assets, either using own capital or that of a third party;

Operate an exchange or trading platform for digital assets or
derivative digital assets;

Evaluation of the risk and the price, as well as the subscription of the emissions of
digital assets;

Placing digital assets on digital platforms or wallets;

14
 and)

1

Promote, structure and manage all types of investment products in
digital assets;

The following operations when they are carried out on behalf of and in favor of
third parties:

1. Transfer digital assets or the means of accessing or controlling them, between
natural or legal persons or between different purchasers, wallets
electronic or digital asset accounts;

2. Protect, guard or manage digital assets or the means to
access or control them;

3. Receive and transmit purchase or sale orders for digital assets or the
trading of derivative digital assets;

4. Execute purchase or sale orders for derivative digital assets.

The National Commission of Digital Assets may, through technical regulations and
procedures, as well as instructions and guides, create procedures and define the

necessary forms for the optimal implementation of the aforementioned services

previously.

Requirements to be a Digital Assets Service Provider

Art. 20.- The requirements to register as an asset service provider

digital are as follows:

a)

b)

Demonstrate that you have the capacity to offer the digital services that you indicate
on your registration form;

If it offers the services established in paragraphs a), b), d) and f) of article
above, provide a list of the digital assets you plan to sell or
trade, including the benefits, restrictions, and limits of such assets
digital, as well as any type of financial and commercial restrictions.
Likewise, it must implement appropriate cybersecurity standards
pertinent in your platform for the operations to be carried out, as defined by
the Commission;

Provide a detail of your organizational structure, including but not
limiting yourself to specific names, positions and functions;

Demonstrate that it has a coherent user service system
and efficient, corresponding to the nature of the service to be provided;

For service providers already registered, they must pay an annual fee
for the renewal of said registration during the first quarter of each year,
regardless of the initial registration date, depending on the amounts

fifteen
determined in this Law. In case the payment is not verified during said period,
your registration will be cancelled.

The Commission will establish the technical, financial and commercial parameters that must be
comply with service providers through the regulations of this Law.

Once the information required in this Law and the regulations
corresponding to digital asset service providers in the format of
request that the Commission determines, it will have a term of up to twenty (20) days
qualified to issue a favorable or unfavorable resolution. In case the request
is incomplete, it will notify the applicant of said situation and will prevent
complete the information within five business days. Once all the
missing information, the Commission will issue its resolution. In case of no-show
complete information, the Commission will issue an unfavorable resolution, and the
service provider resubmit your registration request.

If the resolution is favorable, the service provider must pay the established rate
in this Law. After verifying compliance with the requirements and receiving payment
corresponding, a registration number will be assigned to it.

Registered service providers must pay an annual renewal fee
of such registration during the first quarter of each year, regardless of the
initial registration date, according to the amounts determined in this Law.
verify payment during that period, your registration will be cancelled.

Obligations of Digital Asset Service Providers
Art. 21.- The providers of digital asset services must comply with the
following obligations:

a) Register as a digital asset service provider in the registry
respective;

b) Carry out their activities with honesty and integrity, according to the guidelines of
good business conduct and ethical standards established by the National Commission
of Digital Assets;

c) Pay due attention to the interests and needs of each and every one of
their customers and communicate with them in a clear, fair, balanced and
misleading, according to the nature of the service provided;

d) Provide truthful and easily available information on their digital platforms
about the services they offer;

16
 and)
1)

8)

h)

k)

pp)

q)

Comply with the instructions of the National Commission of Digital Assets and other
competent authorities and provide them with the information they request;

Act diligently, according to the parameters and standards established by the
National Commission of Digital Assets, when admitting the commercialization or sale of
a digital asset in its platforms or infrastructure, as well as in the offers
that they promote and support on their platforms, although they will not be
responsible for the yields or profitability offered by the issuers, nor
of the veracity of the financial data that they present to the public;
Establish a customer service, which can be accessed via
by phone, email or other easily accessible means;

Maintain adequate financial and non-financial resources, as established by the
National Commission of Digital Assets;

Manage and control its activity effectively, and carry it out with due
skill, care and diligence, taking into account the risks to their activity and
Your clients;

Have and apply effective mechanisms for the protection of digital assets
and the fiduciary money of the issuers and acquirers, when they are
in your custody;

Have and apply effective mechanisms to prevent price manipulation
and maintain market integrity, established in articles 33, 34 and 35 of
this law;

Have and apply effective corporate governance mechanisms, when
correspond;

Report quarterly to the Commission on the prices charged for the
services they offer, including all types of commissions and specific charges;
Implement computer systems that are secure and maintained at a high
level of quality and cybersecurity, according to the criteria and parameters
international standards that have been adopted and established by the Commission;
Have systems in place to prevent, detect and reveal the risks of crime
financial, such as money laundering and terrorist financing;

Have a contingency plan for the orderly and solvent liquidation of
your activity;

Inform the Commission of the cessation of activities and request the deregistration of the
corresponding record;

Immediately inform the Commission every time they admit a currency
stable to trade on your platform, including the features
technical and commercial aspects of said stablecoin.

17
 Chapter V
Public Offerings

Section |
Of the Issuers and Certifiers of Public Offerings

Issuer Requirements
Art. 22.- Issuers, including those that issue stablecoins, may carry out the
public offerings that this Law regulates, as long as they comply with the following
requirements:
a) If you are a legal person, provide a general description of your business
or habitual line of business, including its date of incorporation and registration before the authority
competent and domicile; and if it is a natural person, full name,
Unique Identity Document number, resident card or passport, and
home;
b) Indicate the LRU of your main website;
c) Clearly identify the jurisdictions, countries or territories where
carry out their operations;
d) Provide a list of digital assets that have been issued in public offerings in
other jurisdictions, countries or territories during the last three years;
e) Comply with all the requirements and conditions established in the
regulations and technical standards issued by the Commission;

All the aforementioned information must be included in the Document of
Relevant Information that issuers must submit for their public offering
be certified and licensed. The requirements mentioned in the previous paragraph are
will be considered fulfilled once the public offer of the issuer is enabled by the

Commission.

However, issuers must report any changes to the
information mentioned in the first paragraph of this article within a period not exceeding
ten business days from the time the change was made.

With the exception of the requirement established in literal e) of this article, exemptions from

the requirements mentioned in this article to the State, the Ministry of Finance and the
Central Reserve Bank of El Salvador.

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 Issuers Registry

Art. 23.- Once the public offer of an issuer is enabled by the Commission, the issuer
will automatically become part of a registry of issuers managed by the
National Commission of Digital Assets.

All other aspects related to the organization and operation of the Registry of
Issuers, including the procedures and formats to be used, will be developed in the
respective regulation.

Deregistration from the Registry of Issuers
Art. 24.- The issuer's registry will be unregistered in the following circumstances:

a) When the issuers voluntarily request the National Commission of
Digital Assets their unsubscription, verifying that they do not have offers
authorized public entities pending issuance and have complied with their obligations
in previously enabled public offerings;

b) When one of the public offerings of an issuer was canceled by the
Commission, and does not have pending compliance with offer obligations
previously enabled, the issuer will be deregistered from the Registry and
may not be a part of it again for a period of one calendar year;

c) If the issuer has a public offer enabled pending issuance, and
another of its public offerings was canceled by the Commission, it will not be able to carry out
the public offer that is enabled and will be deregistered from the Registry and
may not be part of it again for a period of one calendar year.

The regulations of this Law will establish the procedures for the suspension or
deregistration of issuers.

Issuers Responsibilities

Art. 25.- The issuers will be responsible for the veracity of the data that they inform in
their public offerings, as well as the information and documentation they provide to
the certifiers and the Commission.

Issuers, either on their own account or through a third party, must have

effective mechanisms to control and safeguard funds, or other digital assets,
obtained during the public offering. Additionally, they will explain how the

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 funds or other digital assets obtained during the public offering, are kept in

custody.

In addition to what is established in the preceding paragraphs of this article, issuers must

comply with the following obligations on a permanent basis:

a)

b)

Act honestly, impartially and professionally in all their actions
before the acquirers and potential acquirers in accordance with the provisions of the
Commission;

Keep updated all the information pertinent to the established requirements
in article 22 of this Law, when applicable;

Keep books, records and other documents, electronically, of the
operations related to the public offerings that it has carried out in the form
prescribed by the National Commission of Digital Assets;

Comply with the obligations established in articles 33, 34 and 35 of this Law;
Comply with regulations, instructions, technical standards, guides and any other
regulations issued by the National Commission of Digital Assets.

Additionally, when making a public offering of digital assets, issuers must

comply with the following obligations:

a)

Carry out a diligent analysis of the digital assets that are issued in their
public offerings, both in their technical and commercial functionality;

Communicate the most relevant aspects of the public offer to the purchasers of
a clear and non-misleading manner;

Maintain pertinent electronic records and documents related to the
public offers that they carry out in the manner indicated by the Commission;

Present, prepare and keep updated its financial statements when the
Commission requests it;

Maintain at one LRU address all pertinent and relevant information to
the public offers that it has issued, including all the information contained in
the Relevant Information Documents of said public offerings.

The technical and operating regulations will establish the procedure that issuers

must continue to make public offerings.

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 Role of Certifiers

Art. 26.- All public offering of digital assets must comply with the authorization of the
itself, for which as a preliminary stage, the certifying entities must carry out a
Comprehensive analysis of the requirements of said public offer, contemplated in the law,
regulations, instructions, technical standards, guides and any regulations issued by the
National Commission of Digital Assets. Subsequently, the certifiers must
issue a report containing its analysis of the feasibility of the proposed public offering,
whether favorable or unfavorable, which in any case will be submitted to the Commission.
Only favorable reports will be considered certified.

Certifier Requirements

Art. 27.- To be a certifying entity, it must be registered with the National Commission
of Digital Assets, having to meet the following requirements: be an entity that
Within your organization, you have at least five (5) years of experience in matters
financial, tax, legal, administrative or related, which may be
accredited in a personal capacity by the partners or shareholders that make up the entity,
who must hold university degrees of higher education, in order that the
entity assumes the experience of its members.

Registry of Certifiers before the National Commission of Digital Assets

Art. 28.- The National Commission of Digital Assets will keep a register of the entities
authorized certifiers in the country, for which it will require the following information and
duly legalized documentation:

a) Deed of incorporation of the company duly registered with the authority
authority and the list of shareholders, which must be updated
annually;

b) Institutional organization chart;

c) International organizational structure, if applicable;

d) Curriculum vitae of the partners or shareholders, with their respective annexes and
certifications of the titles that accredit them;

e) Initial balance and financial documentation;

f) Current company registration;

8) Tax Identification Number.

Once the registration application has been submitted, the National Commission for Digital Assets
will have a period of up to twenty (20) business days to issue a favorable resolution or
unfavorable. In case the application is incomplete, it will notify the applicant of
said situation and will prevent you from completing the information within a period of five days

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 skillful. Once all the missing information is received, the Commission will issue its resolution.
If complete information is not submitted, the Commission will issue a resolution
unfavorable, and the entity may submit its registration application again.

If the resolution is favorable, the certifier must pay the rate established in this Law.
After verifying compliance with the requirements and receiving the corresponding payment,
You will be assigned a registration number.

Registered certifiers must pay an annual fee for the renewal of said certification.
registration during the first quarter of each year, regardless of the date of
initial registration, according to the amounts determined in this Law. In case the
payment during that period, your registration will be cancelled.

Responsibility of Certifiers
Art. 29.- The certifying entities will have the following responsibilities:
a) Evaluate financially and technically the viability and feasibility of the offers
public proposals by the issuers;
b) Evaluate and inform the National Digital Assets Commission about the risks
financial, technical and legal aspects of the public offerings proposed by the issuers;
c) Issue a comprehensive opinion, favorable or unfavorable, with respect to the
certification of the proposals for public offerings and communicate it to the Commission
National Digital Assets;
d) Keep the confidentiality of the information and documentation received by the
potential issuers;
e) Refrain from participating in or advising on any operation that generates signs of
suspicions of illegal activities;
f) Inform the Attorney General of the Republic about possible illegal acts detected in
the evaluation of public offers;
g) Comply with regulations, instructions, technical standards, guides and any other
regulations issued by the National Commission of Digital Assets.

The technical and operational regulations will establish the procedure that will govern the work of
the certifiers.

section II
Of the Public Offerings of Digital Assets

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 Issuance of Public Offerings of Digital Assets

Art. 30.- It will be understood that there is an issuance of a public offer of digital assets
when these are offered to the general public, en masse, and with the aim of
trade or sell such digital assets.

The public offerings referred to in the preceding paragraph may be carried out by issuers, such
as defined in this law, using already existing digital assets, and
building, through them, new digital assets, such as tokens that offer a
performance on a specific digital asset platform or creating digital assets
Totally original by the issuer.

Public offerings may be made by the State, the Ministry of Finance, the Bank
Central Reserve, autonomous institutions, as well as natural and legal persons
private.

Exclusions from Public Offerings of Digital Assets
Art. 31.- The offers of digital assets or their derivatives that are made in an
Private companies are excluded from the provisions of this Law relating to public offerings.

Document of Relevant Information and Enabling of a Public Offer
Art. 32.- Every issuer must prepare the Relevant Information Document when
plan to make a public offering.

The Relevant Information Document must be certified by an entity
duly authorized by the National Commission of Digital Assets.

Once said document is certified, it will be presented to the Commission for approval.
qualification. Once the issue is enabled, the Commission will make available to
potential acquirers the content of the Relevant Information Document in
your LRU address.

The content and parameters that this document must include, and the procedure for
certification and authorization of the emission, will be established in the regulations
corresponding technical and operational.

They are excluded from the obligation to submit the Relevant Information Document
the admissions or requests for admission of a stable coin on a platform
domiciled in El Salvador.

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 competitiveness

Art. 33.- The providers of digital asset services are obliged to supply
products at economically competitive prices and conditions. Said prices,
including commissions or specific charges, must be directly related to
the nature of the service provided. digital asset service providers
shall inform the Commission of all prices and charges charged for the
services they offer. Additionally, they must inform in a clear and visible manner to
users, at the LRU address of its main website or on its platforms and
digital applications, on all amounts charged, including all your
commissions and specific charges.

Both issuers of public offerings and asset service providers
Digital companies must inform potential purchasers of the terms and conditions
of the public offerings that they carry out or market prior to the execution of the
commercialization, transfer or purchase operation. It is presumed that the
acquirers have given their consent and acceptance of the terms and conditions of
the offer, as well as its obligations and rights, when carrying out the transfer or
purchase of digital assets.

In addition, digital asset service providers will identify, with their
identity documents and other necessary information, to all purchasers of the
digital assets from public offerings authorized by the Commission that are marketed
on your platform or digital application. Additionally, they may also deny the sale or
acquisition of a digital asset to any potential acquirer that does not comply with the
identification and transparency of information requirements mentioned above.
The respective procedures related to the identification and transparency of the
purchasers will be developed in the respective regulations.

Issuers of public offerings and service providers of digital assets are
will refrain from performing the following actions, as appropriate:

a) Transmit or plan the emission of false or misleading signals regarding the
public offer that it issues, its demand or the price of digital assets
offered;

b) Set the price of one or several digital assets in coordination with other issuers
or market participants in a manner that causes illicit enrichment
for issuers;

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 c) Carry out an operation, give a trading order or any other activity
or conduct that affects or may affect the price of one or more digital assets,
using fictitious mechanisms or any other form of deception or artifice;

d) Disseminate information through the media, including the Internet, or
by any other means, which implies false or misleading signals as to the
supply, demand or price of a digital security;

e) Coordinate pricing mechanisms for digital assets offered;

f) Carry out actions that seriously threaten the stability and integrity of the
digital asset market;

g) Coordinate purchase schemes for digital assets, prior to the issuance of the
public offering, which results in unusually high price conditions for the
network and technology in which the operation is carried out;

h) Any other practice that the National Digital Assets Commission through
reasoned resolution determines that it inhibits the proper functioning of the market.

However, both issuers and service providers of digital assets
have the power to design public offerings and asset marketing plans
digital standards that set specific standards. These standards may establish
Broad restrictions and limits on the purchase, sale or acquisition of assets
digital for citizens or residents of certain jurisdictions, countries or territories.

Market Integrity

Art. 34.- Issuers and service providers of digital assets must implement
appropriate measures to ensure that the market maintains its integrity and
prevent market abuse and manipulated sales.

Any other action that the National Commission of Digital Assets establishes as
A practice that violates the integrity of the market may be warned through
reasoned resolution issued by the Commission.

Market Manipulation

Art. 35.- Issuers and service providers of digital assets will refrain from
take actions that result in market manipulation. These actions are
following:

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 a)

b)

d)

and)

Damage or delay the operation of the asset trading platform
digital or perform any activity that may have that effect;

Make it difficult for others to identify authentic orders in the
digital asset trading platform or carry out any activity that
may have that effect, including issuing orders that destabilize the
normal operation of a digital asset trading platform;
Create a false or misleading signal about the supply, demand or price of a
digital asset, in particular by issuing orders to initiate or
exacerbate a tendency or the performance of any activity that may have
that effect;

Take advantage of access to a traditional or electronic means of communication
with the aim of expressing an opinion on a digital asset after having
carried out operations for or against said digital asset and benefit from
the repercussions of the opinion expressed on the price of said digital asset,
without having simultaneously communicated the nature of said operations and the
your interests;

Any other action that the National Commission of Digital Assets establishes
as a practice of market manipulation through reasoned resolution.

Benefits
Art.36.- Issuers of digital assets, asset service providers

duly registered digital media, the certifiers, and the acquirers of assets
Digital assets, as well as public offerings of digital assets, will be governed by the following
rules and will enjoy the benefits detailed below:

a)

D)

The performance of the digital assets will be determined at the time of the
transaction, according to the market conditions of digital assets. The
digital assets may have a discount or premium, according to the practice
of the digital asset market in which they are issued;

The face value and returns or income from digital assets
They will be exempt from all kinds of encumbrances, taxes, taxes, rates and
contributions of any kind and nature, present or future, whether
ordinary or extraordinary or even special. Capital gain or income
ordinary obtained by the sale or any other mode of transfer of
digital assets, including debt forgiveness, will be exempt from
any type of taxation;

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 c)

d)

a)

Issuers, certifiers, and digital asset service providers
registered, will enjoy all the tax benefits established in literal b)
of this article regarding the activity related to digital assets that
develop, being exempt from the Tax on the Transfer of Personal Property
and Provision of Services, Income Tax, Municipal or any other
tribute independent of its nature; For the purposes of the provisions of this
literal will also be exonerated from the obligation to withhold said taxes in the
if this obligation exists;

In the case of legal persons, the tax benefits of subparagraphs b) and c),
will apply both to the entity and to the partners or shareholders individually
considered, with respect to the profits or dividends from the
activities detailed in the previous paragraphs;

The tax benefits established in the previous literals will not apply when
digital asset exchange operations are carried out for goods or services
that are not detailed in article 19 of this Law.

Chapter VI
Offenses and Penalty Regime

Penalty Procedure

Art. 37.- The procedure for the determination of the infractions, their sanction, and
prescription will be as provided in Title V of the Sanctioning Power of the Law
of Administrative Procedures.

Infringements and sanctions

Art. 38.- The providers of digital asset services, the certifiers, and the
Issuers of public offerings will be subject to the following sanctions for the
committing the offenses as detailed below:

The following infractions will be sanctioned with a fine of up to one hundred
fourteen minimum wages in the commerce and services sector for each infraction:

1) For service providers and certifiers, do not register in the
Respective records;

2) Omit the information, records, warnings, data, explanations and
extensions required by the National Commission of Digital Assets or its
auditors or provide incomplete reports, including data

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 related to public offerings of digital assets, without cause
justified;
3) Failure to comply with the standards of good conduct and ethics established by the
National Commission of Digital Assets;
b) The following infractions will be sanctioned with a fine that will be determined
between one hundred fifteen minimum wages and three hundred five minimum wages of the
trade and services sector for each offence:

1) Admit or market digital assets on its digital platform without the
due authorization of its issuance by the National Commission of
Digital Assets;

2) Carry out any of the actions established in the fifth paragraph of the
article 33, as well as the actions of article 35 of this Law;

3) Refusing to comply with the resolutions issued by the National Commission of
Digital Assets, according to the procedures established in this
Law and its regulations;

4) Refusing to provide information required by the Commission related to the
issuance of public offering of digital assets, to asset services
digital platforms and users of digital platforms or applications, according to
correspond;

5) Provide wrong or erroneous information to the National Commission of
Digital Assets without correcting it, when warned within the period established by
the Commission;

If the fine is imposed as a consequence of the offense committed, it is canceled
after five business days after acquiring firmness status, it will be applied
a surcharge of twenty percent of the total value of the fine imposed.

c) Issuers that clearly and materially breach the terms and conditions
established in your Relevant Information Document will be penalized with
a fine that will be determined between three hundred and six to one thousand two hundred salaries
trade and service sector minimums; if the fine is imposed as
consequence of the infringement committed is canceled after five business days
subsequent to acquiring firm status, a surcharge of twenty per cent will be applied.
percent of the total value of the imposed fine.

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 d) Issuers will be penalized with a fine of up to one percent of the
the entire value of the initial public offering for committing any of the following
infractions:

1) Carry out an issuance of digital assets without the proper authorization by
part of the National Commission of Digital Assets;

2) Hide material and relevant information about a public offer. The
Commission will ponder the determination of a higher fine
when the hidden information refers to financial risks,
commercial and technological aspects of said offer.

e) In the case of certifiers, when a resolution is issued in which the
determine a breach of their responsibilities and guidelines
issued by the National Commission of Digital Assets through regulations,
administrative resolutions and application guides, they will be sanctioned with the
suspension of his functions for a period of forty-five calendar days.
After said period, an internal hearing will be established, directed by the
National Commission of Digital Assets, in which it will be determined if it is revoked
its quality as certifier permanently or it will be authorized to continue
in their functions.

The regulations of this Law will establish the procedures for the suspension or
cancellation of the quality of certifier and the holding of the hearing mentioned in
the previous paragraph.

Criteria for establishing fines
Art. 39.- The Commission will impose the respective fines taking into account the following
criteria:
a) The seriousness of the offence;
b) The damage caused, either to the purchasers of the Digital Assets or to the
integrity of the Digital Assets market;
c) Indications of intentionality;
d) The ability to pay and the effect of the sanction on the repair of the damage to
the affected acquirers;

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 Mitigating and Aggravating Sanctions

Art. 40.- The sanctions will be attenuated by seventy-five percent when the
offender corrects the breaches, omissions or inaccuracies in which there are
incurred, voluntarily, once the National Commission of Digital Assets
requested or summoned and does so during the first five days of the term
established by it. In case you do it after five days, but you are within
of the established term, no mitigation will be applied.

The sanctions will be aggravated when there is recidivism. Being understood as such,
when the same obligation is breached again, or when, having established the
sanction, is not corrected within the specified period. In this case, the applicable sanction will be
will increase by fifty percent and no type of mitigation will be applicable.

Income of Funds
Art. 41.- The funds from the imposition of sanctions will enter the Fund
General of the State.

Chapter VII
Other provisions

Electronic signature

Art. 42.- The National Commission of Digital Assets will accept the electronic signature, provided
and when it complies with the requirements established in the Electronic Signature Law, in all
its procedures and administrative formalities, including the presentation of
documents and requests for information that issuers, certifiers and providers
of Digital Assets services perform. Said electronic signature will have the same validity and
the same legal and probative effects as a handwritten one.

General Regulations
Art. 43.- The President of the Republic will approve the general regulations of this Law
ninety days after its entry into force.

Provisional Registry of Service Providers

Art. 44.- The service providers of Digital Assets that are
operating, prior to the entry into force of this Law, they must request their registration in
the Registry complying with the requirements established in articles 18 and 20 of this Law, in
within ten business days after the law goes into effect. When requesting your

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registration, they may obtain a provisional registration which will be valid for six

months.

If you do not submit your application within the period established above, you will not be able to continue
carrying out their operations and must submit their request once the
respective regulation, fulfilling all the requirements established by this Law and the

Regulation.

Certification of the Relevant Information Document by the Commission

Art. 45.- As long as there are no entities accredited and registered as certifiers, the
National Commission of Digital Assets will carry out the certification process of the
Relevant Information Documents.

prevalence

Art. 46.- This law will prevail by specialty criteria, over any other
norm or legal provision that opposes or contradicts it in whole or in part.

Validity
Art. 47.- This decree will enter into force eight days after its publication in

the Official Gazette.

GIVEN IN THE BLUE ROOM OF THE LEGISLATIVE PALACE: San Salvador, to the...

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