El Salvador Becomes the First Country to Adopt Bitcoin as Legal Currency

September 17, 2021
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The Congress of the South American country, El Salvador has reportedly passed the Bitcoin Law with an "absolute majority" vote, making it the first country in the world to adopt bitcoin as a legal tender.

Earlier on Wednesday, the country's president, Nayib Bukele, submitted the bill to Congress for a vote.

He announced today via Twitter that the Bitcoin Act has been passed by the country's parliament: 62 of the 84 lawmakers who voted on the bill voted in favor of it.

The passage of the Bitcoin Law makes Saldova the first country in the world to grant legal status to cryptocurrencies. As of now, prices of goods in El Salvador can be marked in bitcoin, taxes can be paid in bitcoin, and such transactions will not be subject to capital gains tax.

The country's president, Nayib Bukele, revealed that "the Salvadoran government will introduce a bitcoin wallet for its citizens, but they will be able to choose whether to use it or not." It was also stated that "El Salvador will adapt the population to Bitcoin transactions through the necessary training and mechanisms."

With about 70 percent of the country's population reportedly without bank cards or bank accounts, cryptocurrency is seen as a means of improving financial inclusion. El Salvador's economy relies heavily on repatriation of funds from abroad, with more than 2 million Salvadorans living abroad but continuing to maintain close ties with their birthplace, repatriating more than $4 billion in funds annually, which account for about 20 percent of the country's gross domestic product.

Following the news, bitcoin pulled up briefly above $34,000 per coin.

According to CoinDesk, bitcoin had hit a record of $64,829.14 in April of this year but has since taken a nosedive. Still, the cryptocurrency has accumulated a 230% gain over the past 12 months. This rise stems from a growing interest from institutional investors, as well as buying from large corporations such as Tesla and Square. Bitcoin's legalization process in El Salvador.

On June 5, 2021, El Salvador's President Buerkle announced at the Bitcoin Conference that Bitcoin would become legal tender in the country.

On June 9, 2021, the Salvadoran Legislative Assembly passed the Bitcoin Law with an absolute majority of 62 votes in favor and 22 votes against it.

On June 24, 2021, Buerkle builds momentum for the bill by announcing another bitcoin airdrop of $30 per newly created account at no cost, for a total value of $135 million.

On September 7, 2021, El Salvador officially became the first country to adopt bitcoin as legal tender.