El Salvador has become the first country to grant legal tender status to Bitcoin. A majority of lawmakers in the Central American country voted in the favour of the Bitcoin law, which was moved by President Nayib Bukele.
Taking to Twitter, the president said “#BitcoinLaw has been approved by a supermajority in the Salvadoran Congress”. Its adoption as legal tender will go into law in 90 days. He also offered citizenship to those who invest the cryptocurrency in El Salvador. “People investing three Bitcoins in country’s economy will be given citizenship by the government.” he said.
Bukele, however, clarified that the US Dollar will also continue as legal tender and use of Bitcoin will be optional, adding that it would not bring risk to users. “The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction,” Bukele said.
The bill was passed in El Salvador after getting 62 out of possible 84 votes. “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 law reads. The law will allow citizens of El Salvador to show prices in bitcoin. It will also enable tax payers to make contributions with the digital currency. Also, exchanges in bitcoin will not be subject to capital gains tax.
The President has backed the cryptocurrency’s use in boosting the economy. El Salvador’s economy relies on remittances and those who are working abroad can send money back home in bitcoins.