El Salvador might become the first country to make Bitcoin legal tender. The president of the country, Nayib Bukele, recently proposed a law to congress about this matter. If the new law is approved, it will make El Salvador the first country in the world to make Bitcoin legal tender.
The so-called Bitcoin Law aims to regulate BTC as an unrestricted legal asset in the country. If passed, shops will be able to show prices in Bitcoin, people will be able to pay taxes in Bitcoin, and exchanges in Bitcoin will not be taxed as capital gains.
Although the president posted the document online, it is still unclear how the country plans to roll it out. The proposed law reads that the rate with the US dollar will be “freely established” by the market. As of today, El Salvador uses the US dollar as the official currency of the country.
In addition, the law also reads that the country is ready to promote necessary training so that people of the country better understand how to access Bitcoin transactions. The law also states that cryptocurrency is a way for the country to increase financial inclusion. However, before it is passed as a law, the proposal will need to go through the legislative process in the country.
This is not the first time that the country’s president has shown interest in cryptocurrency. The President of El Salvador recently announced that they had finalized a partnership with Strike, a digital wallet company. According to President Bukele, the partnership aims to build a new and modern financial infrastructure in El Salvador by using Bitcoin.
What does it mean for crypto?
Experts say that the country is very likely to pass the law. Bukele’s party controls Congress, and it is very likely to vote in favor of the President’s new law. If it happens, El Salvador will become the first country to use Bitcoin as a legal tender.
This historic decision will mean a lot for not only Bitcoin but for the whole cryptocurrency market. For a long time now, jurisdictions worldwide have been avoiding embracing cryptocurrencies largely because of the extreme volatility. However, the first half of 2021 showed how fast things could change in the market.
For example, Bitcoin hit the all-time highs in the first few months of 2021, only to fall quickly after. Some of the other less popular cryptos are even more volatile, and the tiniest events in the market have a significant impact on their prices.
That said, the boom in the crypto market has managed to receive massive attention from Central Banks around the world. There are several reasons why cryptos are becoming so popular. First of all, the transactions happen almost instantly, and there is no bank account required. All people need to use crypto is a digital wallet.
If the Congress of El Salvador passes the law, it will be a huge step forward for Bitcoin and the whole cryptocurrency market. Although many countries worldwide have shown interest in crypto, none of them have ever gone as far as El Salvador.
The popularity of crypto
Although many have thought that the crypto market hit its heights in 2017, the recent boom in the market has proved them wrong. At the beginning of 2021, the majority of cryptocurrencies were trading at the highest prices.
This has further increased the popularity of crypto, and it has slowly become a very attractive venture. Although the volatility of the crypto market is scary for some people, for others, it is one of the main reasons for its popularity.
The volatility of the crypto market is making it a very popular trading asset. The number of people trading crypto is increasing day by day. However, because the market is so volatile, it is tough to analyze the ongoing events in the market and the historical data for successful trading.
Many companies have created different types of tools that help traders make better predictions about crypto prices because of this. One of such tools is the Bitcoin trading bot that most have already heard of.
The bots in the crypto market can analyze past movements and go through different types of news and releases and make predictions in just a few seconds. Doing all the research manually would take a very long time, while the bots are doing it in a fraction of the time.
Why did Bukele Propose The New Law?
President Bukele announced the adoption of Bitcoin as a legal tender at a Bitcoin 2021 conference in Miami. Following the announcement, he discussed the significant benefits of Bitcoin.
Among many benefits for the adoption of Bitcoin as a legal tender would be that it would make it easier for the country’s population living outside of El Salvador to send money back to the country.
In addition, the president also says that it will make El Salvador more attractive for people around the world. According to him, there won’t be any capital gain tax for Bitcoin, as it will be a legal currency. For crypto entrepreneurs, the country is also offered an immediate permanent residence.
The adoption of Bitcoin as a legal tender will make El Salvador the first country to do so. This historic decision will forever change the way people view Bitcoin and be considered a whole new level of success for the cryptocurrency.