El Salvador has become the first country in the world to approve bitcoin as the official currency alongside USD. The El Salvador congress on June 9 approved a bill making bitcoin legal tender in the country. El Salvador president Nayib Bukele announced through Twitter.
Lawmakers in the Central American country’s congress voted by “supermajority” in favor of bitcoin law. It receiving 62 out of 84 of the legislature’s vote. The Bitcoin Law will come into effect in the next 90 days.
“The purpose of this law is to regulate bitcoin as unrestricted legal tender will liberating power, unlimited in any transaction, and to any title that public or private natural or legal person require carrying out,” the law reads.
Earlier on Wednesday, President Nayib Bukele sent the law to the country congress for a vote. He said that making Bitcoin a legal tender will provide a major boost to the country’s economy. Once in place, all merchants operating in the country will have to accept Bitcoin payments.
Bukele clarified that the US Dollar will also continue as legal tender and use of bitcoin will be optional. It would not bring risk to users. “The government will guarantee the convertibility to the exact valuew in dollars at the moment of each transaction.”
Goods prices can now be shown in bitcoin with US Dollar. Similarly, residents can pay tax contribution with digital currency. The El Salvador government will operate a Bitcoin wallet for the same. Exchange in bitcoin will not be subject to capital gains tax. Anyone can get permanent residency in El Salvador for investing 3 BTC in their economy.
The country doesn’t have its own currency. The country is currently working with the US dollar as the official currency. In exchange, it is said that the rate with US dollar “will be freely established by the market.”
The law also says that the state will “promote the necessary training and mechanism so that the population can access bitcoin transactions”. According to the Bitcoin law, approximately 70% of El Salvador does not have access to traditional financial services.
The decision comes just a few days after Bukele said that would send a bill to Congress next week to make bitcoin legal tender.
