El Salvador’s president has announced that he will make the Bitcoin cryptocurrency a legal tender in the country.
President Nayib Bukele tweeted today that he had sent the “Bitcoin Law’” to Congress. If the law is passed El Salvador will become the first country in the world to formally adopt the digital currency.
“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 oor legal persons require carrying out,” the law reads.
If passed, tax contributions can be paid with the digital currency, prices can be displayed in bitcoin, and exchanges in bitcoin will not be subject to capital gains tax.
Bukele explained that the currency would also make it easier for Salvadorans living abroad to send payments, opening up financial services to the 70% of locals who do not have bank accounts.
“In this short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy,” in addition to boosting investment to the country, said Mr Bukele to Bitcoin conference in Florida.
The annoucement has prompted critics to suggest that bitcoin is not suitable enough to be an effective currency due to its wild price swings.
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