Bill to make Bitcoin legal tender passes in El Salvador

Bill to make Bitcoin legal tender passes in El Salvador

The President of El Salvador's bill to make Bitcoin legal tender in El Salvador passed Congress with a supermajority just before 6AM UTC.

In a Twitter Spaces conversation that began just after 5AM UTC with 22,000 listeners President Nayib Bukele said he would sign off on the historic law later tonight or first thing tomorrow.

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“It goes into effect immediately,” he said, clarifying the government would allow 90 days for the infrastructure to be put into place.

He said that accepting Bitcoin would be mandatory for all businesses. “They have to take it by law,” he said of merchants in the country. “If you go to Mexico they have to take your pesos.

“In the case of El Salvador Bitcoin is going to be legal tender just as the US Dollar.”

He revealed that he will be meeting with the International Monetary Fund on Thursday. The government will also be releasing an official Bitcoin wallet (however this will not be mandatory). The government intends to hold $150 million equivalent of Bitcoin in a trust fund in its development bank to assume the risks of merchants.

Permanent residency will be available for those who invest 3 BTC in El Salvador. Asked if the country would put Bitcoin in its reserve he said there were no immediate plans:

"I don't know this is evolving very fast. We're not ruling out having Bitcoin in our reserves in the near future."

The President said he hasn't thought of Bitcoin mining but was favorably disposed towards the idea of renewable energy Bitcoin mining.

The Bitcoin law was a bill submitted earlier today after Bukele tweeted that “I’ve just sent the Bitcoin Law to congress,” and uploaded copies of the bill in Spanish and English.

“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,” the bill reads.

The bill includes a list of interesting proposals such as zero capital gains tax on BTC, tax payments allowed in BTC, and economic agents “must” accept BTC as payment when offered by “whoever acquires a good or service.”

According to the bill, the state will provide the infrastructure that enables Bitcoin users to instantly convert from BTC to USD if need be. Additionally, the state will provide “training and mechanisms” to aid citizens unfamiliar with Bitcoin — as many will need to learn how to use the digital asset.

Interestingly, following Bukele’s latest announcement, he changed his Twitter profile picture to one that features blue laser eyes, as opposed to the red onesusually found in the iconic crypto meme.

Bukele’s progressive crypto move has sparked enthusiasm from a number of politicians throughout Latin America, who have either touted crypto proposals of their own or donned red laser eyes in support of crypto.

On June 7, Paraguayan congressman, Carlitos Rejala posted laser eyes and promised a Bitcoin announcement later this week.

The following day Mexican senator Eduardo Murat Hinojosa revealed he plans on ““promoting and proposing a legal framework for crypto coins in Mexico's lower house.”

While Gabriel Silva, a Panamanian congressman also stated plans to submit a pro-crypto bill that same day.

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