In World’s first, El Salvador becomes the first country to adopt Bitcoin as legal tender. After President Nayib Bukele proposed this, Congress on Wednesday approved his proposal which will surely delight the currency’s supporter.
The vote was 62 out of 84, despite concern about the potential impact on El Salvador’s program with the International Monetary Fund.
“Bitcoiners around the world, the time has come. We are ready. We did our part, now the ball is on your side,” said William Soriano, a ruling party member and one of the 62 lawmakers who voted for the bill.
The Central American country of 6.5 million, one of the region’s poorest, has struggled over the years to manage its finances and has used the U.S. dollar as its official currency since 2001.
Under the law, bitcoin can be used for purchases or tax payments, and bitcoin exchanges will not be subject to capital gains tax.
President Bukele tweeted that the new law “will bring financial inclusion, investment, tourism, innovation and economic development for our country.” It is estimated that remittances (monies sent home from abroad) make up about 20 percent of El Salvador’s GDP. At the same time, according to the legislation, about 70 percent of the country does not have access to banking. Bitcoin transfers do not require bank accounts so there is hope is that the new law will provide greater access to financial services.
