El Salvador becomes the first country to approve bitcoin as legal tender, the county’s president said.
Lawmakers in the Central American nation’s Congress passed a bill late Tuesday, June 8, that will eventually allow the digital currency to be used for many aspects of daily life, from property purchases to tax contributions.
The Bitcoin Law was passed by a “supermajority” in a 62-22 vote by the country’s congress
“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,” El Salvadorean president Nayib Bukele outlined in a document uploaded to his Twitter account.
The document states that Bitcoin can be used and must be accepted by any business or for any retail purchase and in tax contributions, and that exchanges of Bitcoin will not be subject to any capital gains tax.
“The #BitcoinLaw has just been approved by a qualified majority” in the legislative assembly, President Nayib Bukele, 39, tweeted after the vote late Tuesday.
“History!” the 39-year-old president added.
With 62 out of 84 possible votes, lawmakers voted in favor of the move to create a law to adopt bitcoin, despite concern about the potential impact on El Salvador’s program with the International Monetary Fund.
President Bukele said on Twitter before the vote in Congress: “It will bring financial inclusion, investment, tourism, innovation and economic development for our country.”
The use of bitcoin will be optional for individuals and would not bring risks to users, Bukele said. The government will guarantee convertibility to dollars at the time of transaction through a trust created at the country’s development bank BANDESAL.
Its use as legal tender in El Salvador will go into law in 90 days, with the bitcoin-dollar exchange rate set by the market.
According to the “Bitcoin Law”, bitcoin must be accepted by firms when offered as payment for goods and services. Tax contributions can also be paid in bitcoin.