Saturday, May 21, 2022

Bitcoin Pumps 5% As El Salvador Accepts It As A Legal Tender

El Salvador became the first sovereign country in the world to accept Bitcoin as an official currency along with the dollar. 

On June 09, the President of El Salvador, Nayib Bukele, announces the approval of Bitcoin as a legal tender in the country, and soon after that, the price of cryptocurrency pumped up by 5 percent in the market, as the price reached near $34,000.

Earlier this morning, Bukele presented the Bitcoin Law in front of Congress for a vote. The law got supermajority approval, as out of 84 legislative members, 62 cast their votes in favor of it.

The Bitcoin Law presented among Congress Lawmakers reads, “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.”

Now, the prices of goods could be presented in Bitcoin in El Salvador. Also, the citizens are allowed to pay the taxes in digital currency. 

Notably, the crypto exchanges in the country would not be subjected to capital gain tax.

Bitcoin has high price volatility, therefore, the critics do not support using it as an effective currency. But now, as El Salvador has accepted it as a legal tender, it would be exciting to see how the country would introduce it as the same.

The law proposed in front of the lawmakers states, “The exchange rate with the U.S. dollar will be freely established by the market.”

Presently the official currency of El Salvador is the US dollar.

According to the proposed law, “The state will promote the necessary training and mechanisms so that the population can access bitcoin transactions.”

The Bitcoin law further specified that till date, 70 percent of El Salvador citizens do not have the access to traditional financial services. However, now the government is hoping to increase citizen’s financial inclusion through cryptocurrency.

A week ago, the President of El Salvador announced their partnership with Strike, a digital wallet company. Through this partnership, Bukele is hoping to develop the financial infrastructure of the country.

As per data released by CoinDesk, although Bitcoin’s value has dropped by nearly half since April, after reaching an all-time high of $64,000, it is still performing well in the market. Compared to its past 12 months performance, Bitcoin is up by 230 percent. 

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