In a historic move for the cryptocurrency industry, El Salvador became the first country in the world to adopt bitcoin as legal tender on Wednesday, when Congress accepted President Nayib Bukele’s request to do so, delighting cryptocurrency fans.
Despite concerns about the potential effects of El Salvador’s agreement with the International Monetary Fund, lawmakers voted in support of the motion to develop legislation to embrace bitcoin with 62 of 84 available votes.
Bukele has extolled the usage of bitcoin for its potential to assist Salvadorans working abroad in sending remittances home while maintaining that the US dollar will remain legal money as well. El Salvador does not have its own currency in practice.
“It will bring financial inclusion, investment, tourism, innovation and economic development for our country,” Bukele wrote in a tweet right before the vote in Congress, which his party and allies dominate.
Bukele later stated that he had authorized state-owned geothermal electric company LaGeo to draft a strategy to encourage bitcoin mining facilities to be powered by green energy from the country’s volcanoes.
Individuals will be able to use bitcoin freely without fear, according to Bukele, with the government ensuring convertibility to dollars at the time of the transaction via a $150 million trust formed at the country’s development bank BANDESAL.
Under the legislation, businesses must accept bitcoin as payment for products and services. Taxes may also be paid in bitcoin. It will become legal tender in 90 days, with the market setting the bitcoin-to-dollar conversion rate. Bukele added that neither the government nor the Central Bank currently held any bitcoin.
Crypto enthusiasts have applauded the move as legitimizing the emerging asset, but its effects on bitcoin legislation, taxation, and acceptance in other nations remain to be seen.
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