El Salvador becomes the first country to adopt bitcoin as a legal tender after passing a legislation bill. Lawmakers in this central American voted wholeheartedly in favor of bringing bitcoin into the country. Lawmakers cast 62 votes in favor of legal tender out of 84 legislature votes.
After the voting concluded, the price of bitcoin rose from 5% to $34,239.17. President of El Salvador Nayib Bukele has earlier sent the law to Congress for approval. “The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the law reads.
Now the citizens can pay their taxes with digital currency bitcoin. There will be no capital gain tax in exchanges using bitcoin currency; bitcoin price value changes every hour. According to the experts, this digital currency is not suitable for everyday use.
El Salvador has not revealed how the implementation of bitcoin will take place after passing the law. Also, the exchange rate will be freely established with the US dollar exchange rate by the market as the country uses the same currency that is US dollars.
The law stated by the government also reveals that there will be proper procedures and training to promote bitcoin transactions in the future. About 70% of El Salvador citizens do not have access to traditional financial services, as stated in the Bitcoin Law. Bitcoin will increase the financial inclusion of the country.
President Bukele announced to pass the law after El Salvador struck his deal with digital wallet company Strike to strengthen the country’s financial infrastructure using bitcoin technology.
The digital currency has been all-time high this year with the price of $64,829.14. There was a steep decline, but it has been rising for the last 12 months like never before.