El Salvador becomes the first country in the world to officially adopt Bitcoin

By: Bharggavi Ssayee

June 11, 2021 5:48 PM

Many countries are considering - sometimes severely - restricting Bitcoin and its use. At the same time, other countries are rolling out the red carpet for it. This is the case of El Salvador, for example, which has just officially passed its "Bitcoin Law" to Parliament!

The "Bitcoin Law" adopted by Parliament in El Salvador!

Salvadoran President Nayib Bukele announced last Saturday that he would submit the "Bitcoin Law" to Parliament this week. The announcement was made during a remote speech at the Bitcoin assembly held in Miami, Florida. This law aims to officially recognize Bitcoin as legal tender.

It's done ! As announced by the President himself on Twitter, the law was passed with 62 votes out of 84!

“We hope this move is just a start to provide a space where some of the world's leading innovators can reimagine the future of finance, potentially helping billions of people around the world. »Nayib Bukele, President of El Salvador

Since 2001, the official currency of El Salvador has been the US dollar. Recognition of Bitcoin is not going to change that. Far from replacing the dollar, Bitcoin is simply becoming another alternative payment method. Concretely, stores and other services will have to equip themselves to accept the use of Bitcoin (in addition to the US dollar).

El Salvador officially recognizes Bitcoin as a national currency!

This decision is part of a more global desire to fundamentally transform the country and improve its attractiveness. It is therefore estimated that the official recognition of Bitcoin should lead to the creation of thousands of jobs. In addition, it would include the surrounding 70% inhabitants of El Salvador who do not have access to the traditional banking system.

Since Bitcoin is now officially recognized, President Bukele has announced that there will be no Bitcoin capital appreciation tax. Plus, crypto entrepreneurs will automatically be granted a residence permit in the country!

Finally, it should be noted that about a fifth of the country's GDP comes from sending money from abroad. Most often, these are expatriate family members sending money back home. Between 4 and 6 billion dollars are sent each year. With the recognition of Bitcoin, these money transfers will be made easier and above all cheaper since they are carried out peer-to-peer.