The spearhead of this transformation of the financial fact in El Salvador is the Law on the Issuance of Digital Assets (LEAD), proposed by the ruling party in 2022 and approved by Parliament a few months later, with which it seeks to consolidate and protect the rights of issuers and buyers of digital assets.

Initially presented as support for the sale of bonds intended for the construction of the hypothetical Bitcoin City, the LEAD establishes the legal framework for the transfer operations of any kind of digital assets used in the issuance of public offerings, as well as regulates the requirements and obligations of issuers, service providers, and other participants operating within the public offering process.

Among other advantages, the regulation allows for reduced financing costs, enabling access to resources that are often prohibitive for many small businesses and startups, while democratizing participation from non-traditional financiers and small new investors.

Additionally, the law offers significant tax benefits, including exemptions from the payment of taxes and duties on the nominal value and returns of the involved assets, on capital gains or ordinary income obtained. Among others, issuers, certifiers, and registered digital asset service providers are exempt from VAT, Income tax, municipal taxes, or any other duty; benefits that also apply to partners of the involved companies.