El Salvador has officially become the world’s first country to approve crypto and adopts Bitcoin as legal tender. On June 9, El Salvador’s Congress passed the bill to legalize Bitcoin with a majority of 62 votes out of a total of 84. The country’s populist president, Nayib Bukele took to his Twitter account to confirm the same. Previously, he announced that his country would grant citizenship to people who invest Bitcoin in El Salvador’s economy.
The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress.
62 out of 84 votes!
— Nayib Bukele 🇸🇻 (@nayibbukele) June 9, 2021
El Salvador Makes Bitcoin Legal to Include Thousands into Formal Economy
In his last address, Bukele suggested that the ambitious move will generate jobs in El Salvador, and bring thousands of people under the umbrella of the formal economy. In addition, he claimed that legalizing Bitcoin would enable El Salvadorians living overseas to send remittances back home.
The president also added several benefits for Bitcoin holders, including no capital gains tax, after he first revealed his intentions in a recorded message aired at the Miami Conference. Bukele also proposed the establishment of satellite infrastructure to provide internet connectivity and the Bitcoin network to people based in rural areas. The government has also partnered with the Lightning payment app, Strike, to ensure that cryptocurrency could be easily exchanged for US dollars.
Under the new decree, entrepreneurs investing three bitcoins in El Salvador’s economy will be given citizenship by the government.
The groundbreaking legislation will come into effect in a period of 90 days
Challenges Lie Ahead for Other Countries Willing to Legalize Bitcoin
El Salvador’s legalization of Bitcoin has prompted several countries to draw up similar proposals. Many politicians in Latin America have heralded the development as the future of finance and technology. But a major reason behind El Salvador’s success was that the country did not have its own currency. Before this legislation, the Central American nation depended solely on the U.S. dollar to carry out all its transactions.
Apart from this, the digital asset’s volatility — cited by governments across the world — will make broader adoption trickier. Presently, authorities in the U.S., China, and India are in the process of developing legal frameworks to restrict, and in some cases, ban crypto transactions.