• El Salvador has approved Bitcoin as official currency.
• It is the first country to make Bitcoin legal tender.
• People investing in Bitcoin will get El Salvador citizenship.
President Nayib Bukele
It is official now! The Central American nation, El Salvador has adopted Bitcoin as legal tender. The President Nayib Bukele announced on Twitter. “The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes! History!
”El Salvador’s legislative assembly also tweeted the approval. “With 62 votes, the legislative plenary session approves the #LeyBitcoin (Bitcoin law) with which EL Salvador adopts the #Bitcoin as legal currency.”
The price of Bitcoin was up from $33,555 to $34,398, as per CoinMarketCap, shortly after the announcement of the approval.
A copy of the law shared by the President on Twitter read: The exchange rate between Bitcoin and the United States dollar, will be freely established by the market. Prices may be expressed in Bitcoin. Tax contributions can be paid in Bitcoin. Exchanges in Bitcoin will not be subject to capital gains tax, just like any legal tender. All obligations in money expressed in USD, existing before the effective date of this law, may be paid in Bitcoin.
Commenting on the law, Silicon Valley angel investor Balaji Srinivasan tweeted, “Amazing. If I’m reading this right, all economic agents that are technologically capable of receiving BTC as payment *must* accept it as payment — though instant conversion to USD is made available to anyone who doesn’t want to take price risk. A mandate for Bitcoin.”
President Bukele on Monday had announced that there won’t any capital gains tax on Bitcoin after it becomes the legal tender and that there would immediate permanent residence offered to crypto entrepreneurs in the country. There was a temporary spike in interest as well among people checking for real estate in El Salvador after the President’s announcement of making Bitcoin as legal tender on Sunday.
Here is was it was easy to adopt as legal currency
The development should come as major boost for crypto enthusiasts but it won’t be easy for other countries to replace fiat currency with digital money. One of the reasons why El Salvador was able to do it is because it doesn’t have its own currency. The country currently uses the US dollar as the official currency. It has said that the exchange rates with the US dollar “will be freely established by the market.
It may be noted that 70 per cent of the country’s population doesn’t have access to traditional financial services.
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