Bitcoin Recognized as Official Currency in El Salvador

Bitcoin is legalized as an official currency in El Salvador. Just a few days ago, Nayib Bukele, President of El Salvador, announced at the Bitcoin Conference 2021 in Miami that he would accept Bitcoin (BTC) as a means of payment. Congress approved the bill with an absolute majority vote.

Nayib Bukele is true to his word and didn’t hesitate long before sending the bill to Congress for the legalization of Bitcoin as an official currency. Now that is a certainty. The absolute majority was in favor of making bitcoin legal tender. This means that bitcoin will also become an official means of payment alongside the US dollar.

Bukele announced that all merchants will be obliged to accept Bitcoin. A development fund with $150 million is to be created to support the traders in this. However, the country has not yet planned reserves in Bitcoin. However, everything is currently happening so quickly that this cannot be ruled out in the future. Bitcoin mining with renewable energy is also a possibility for the state.

At the Bitcoin conference, Bukele also explained that around 70 percent of El Salvador’s inhabitants do not have a bank account. Gross domestic product would benefit tremendously from bitcoin as a payment method if only 1 percent of the bitcoins in circulation were used in El Salvador. Bukele sees great potential in the use of bitcoin as an official currency.

The new law goes into effect immediately. The government will now use a 90-day window to build the infrastructure. By doing so, the state wants to enable the immediate exchange of BTC into USD. Furthermore, no capital gains tax is to be paid on profits from cryptocurrencies. In addition, citizens will be allowed to make tax payments in bitcoin.

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Permanent residency for Bitcoin investors

The country now also has an offer for immigrants who want to enjoy Bitcoin as an official currency. Namely, those who pay a total of 3 BTC will receive a permanent residence permit in the Central American country.

According to the current exchange rate, the price for the permanent residence permit is therefore around $100,000. While an expensive endeavor, it is also quite possible for Bitcoin lovers. To protect against scammers, training and education for residents are also planned.

Bitcoin as a currency could catch on in Latin America

After Bukele announced its intention to legalize Bitcoin, other countries also quickly followed suit with similar plans. While Paraguay announced a Bitcoin project in collaboration with Paypal, Gabriel Silva, a Panamanian congressman, and Mexican Senator Eduardo Murat Hinojosa also came forward. Both countries also plan to define Bitcoin in more detail in a legal sense and accept it as a currency if necessary.

If more countries actually decide to introduce Bitcoin as an official currency, this could also become a bigger issue in Europe in the future. After the price had fallen sharply recently, the price of Bitcoin was able to recover slightly and is currently at around $34,300.

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(Featured image by tombark via Pixabay)

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