El Salvador creates history: Becomes world’s first country to adopt Bitcoin as legal currency

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June 09, 2021 2:02 PM

The price of Bitcoin was marginally up from $33,555 to $34,398, as per CoinMarketCap, shortly after the announcement of adopting Bitcoin as legal tender by El Salvador's President Nayib Bukele on Wednesday morning.

On Monday, Bukele said that the country had bought 400 bitcoins in total. (Source: Twitter/@nayibbukele)

El Salvador is now officially the first country in the world to adopt Bitcoin as legal tender. The Central American nation’s Bitcoin law, which was sent to its Congress on Wednesday morning by President Nayib Bukele, was approved in the legislative assembly by a “supermajority” with 62 out of 84 votes. The announcement was made by President Bukele on Twitter. “The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes! History!” the tweet at 11:35 AM IST read.

El Salvador’s legislative assembly also tweeted the approval. “With 62 votes, the legislative plenary session approves the #LeyBitcoin (Bitcoin law) with which EL Salvador adopts the #Bitcoin as legal currency.”

The price of Bitcoin was up from $33,555 to $34,398, as per CoinMarketCap, shortly after the announcement of the approval.

A copy of the law shared by the President on Twitter read: The exchange rate between Bitcoin and the United States dollar, will be freely established by the market. Prices may be expressed in Bitcoin. Tax contributions can be paid in Bitcoin. Exchanges in Bitcoin will not be subject to capital gains tax, just like any legal tender. All obligations in money expressed in USD, existing before the effective date of this law, may be paid in Bitcoin.

Commenting on the law, Silicon Valley angel investor Balaji Srinivasan tweeted, “Amazing. If I’m reading this right, all economic agents that are technologically capable of receiving BTC as payment *must* accept it as payment — though instant conversion to USD is made available to anyone who doesn’t want to take price risk. A mandate for Bitcoin.”

President Bukele on Monday had announced that there won’t any capital gains tax on Bitcoin after it becomes the legal tender and that there would immediate permanent residence offered to crypto entrepreneurs in the country. There was a temporary spike in interest as well among people checking for real estate in El Salvador after the President’s announcement of making Bitcoin as legal tender on Sunday.

Source: Google Trends

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