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During the Bitcoin Conference held over the weekend in Miami, the President of El Salvador announced that the country will become the first to declare bitcoin as legal tender.
Bukele, a 39-year-old, right-wing populist who rose to power in 2019, has a strong majority of 56 out of 84 seats since a landslide victory in legislative elections last March. That means passage of the bill is likely, he commented:
“Central banks are increasingly taking actions that may cause harm to the economic stability of El Salvador. Next week, I will send to Congress a bill that will make bitcoin a legal tender in El-Salvador. In the short-term, this will generate jobs and help provide financial inclusion to thousands.”
Bitcoin, El Salvador opposite approach to China
While other countries such as India and China are banning cryptocurrencies, El Salvador has decided on an opposite strategy, making bitcoin a legal tender at the level that the country’s central bank will adopt BTC as part of the national reserve.
Strike e Lightning Network
Strike CEO Jack Mallers, who is working with El Salvador to help El Salvadorans use bitcoin, and in particular the Lightning Network, for fast, low-fee transactions, also spoke during the speech.
Mallers said:
“Over 70% of the active population of El Salvador doesn’t have a bank account. They’re not in the financial system. They [the government asked me to help write a plan and that they viewed bitcoin as a world-class currency and that we needed to put together a Bitcoin plan to help these people.”
Mallers also appears to have helped the country write a bill to enable the adoption of Bitcoin in the country. It reads:
“By adopting Bitcoin as a legal tender, El Salvador would have become the first country in the world to make such a bold move, and hopefully will not be the last as other countries warm up to Bitcoin.”
On Twitter, the President of El Salvador also made it known that there will be no capital gains tax and residency will be granted to all crypto entrepreneurs:
1. Great weather, world class surfing beaches, beach front properties for sale.
2. One of the few countries in the world with no property tax.
3. No capital gains tax for #Bitcoin, since it will be a legal currency.
4. Immediate permanent residence for crypto entrepreneurs. https://t.co/j3eugJQCMd— Nayib Bukele 🇸🇻 (@nayibbukele) June 6, 2021