Under the legislation, prices can be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.
Salvadorian President Nayib Bukele announced in a video recording shown during the Bitcoin 2021 conference held in Miami that he has a strong belief in cryptocurrency.
“It will bring financial inclusion, investment, tourism, innovation and economic development for our country,”
Bukele said in a tweet shortly before the vote in Congress, which is controlled by his party and allies.
Bukele added that the use of Bitcoin would not bring risks to users.
Its use as legal tender will go into law in 90 days
“The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction,”
El Salvador’s dollarized economy relies heavily on money sent back from workers abroad. World Bank data showed remittances to the country made up nearly $6 billion or around a fifth of GDP in 2019, one of the highest ratios in the world.
