The tiny Central American country of El Salvador has become the first in the world to adopt bitcoin as legal tender after its Congress voted overwhelmingly (62 out of 84 lawmakers) in favour of it.
“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,” read the so-called Bitcoin Law proposed by El Salvador President Nayib Bukele, according to CNBC.
The approved law means that, going forward, prices can be shown in bitcoin and taxes and be paid with the cryptocurrency, CNBC said. Additionally, bitcoin transactions will not be subject to capital gains tax. El Salvador currently uses the US dollar as its official currency, and the law stated that the exchange rate with the dollar “will be freely established by the market.”
Aimed at boosting financial inclusion, the law reportedly noted that roughly 70% of the country doesn’t have access to traditional financial services. It said the government will provide the “necessary training and mechanisms” for bitcoin access.
That’s a bit of good news for bitcoin, which has been reeling from the news of China’s clampdown on cryptocurrency and Tesla’s 180 on its decision to accept bitcoin as payment for cars. Powerful institutional actors like the Governor of the Bank of England and populist nationalists like Donald Trump have also taken a dim view of cryptocurrency.