Bitcoin becomes the Official Currency of El Salvador

Bitcoin was approved as the official currency of El Salvador. The South American country is the first country to legalise the cryptocurrency. 

With Bitcoin being made a legal tender in the country, Bitcoin investors in El Salvador will be exempted from capital gains tax. The President, Nayib Bukele, has also announced that people who invest in Bitcoin will be granted the citizenship of the country. 

Bukele has made a public announcement regarding Bitcoin’s capability to help the Salvadorans who live out of the country to send money to their family in Salvador. The legislation was passed by the congress in its last session with a majority of 62 out of 84 electoral votes. With this legislation Bitcoin has become a legal tender in El Salvador which can be used in any public or private transaction made by Salvadoran nationals.

The State has ensured its people that they would provide them adequate training to use the Bitcoin cryptocurrency and to navigate through the transaction process. It has also mentioned its plans to make the conversion of Bitcoin to Dollar instant and efficient. Providing training to citizens to use Bitcoin will also ensure that the tax contributions made to the country are done through digital currency.

Bukele is of the opinion that this will help to create more job opportunities and also financial inclusion to a large group of people who are outside the formal economy in the long run.

The Co-CEO of ZebPay, Avinash Shekhar, mentioned that Bitcoin has great potentials and can be considered as one of the biggest technological innovations. Bitcoin which was mere a code written by Satoshi has now been accepted as the official currency of a country. He mentioned that people who are involved in the area of cryptocurrency is eager to know El Salvador’s policies to integrate Bitcoin into its economy.

El Salvador uses US Dollar as its currency as it does not have its own official currency. This makes it easier for the country to integrate Bitcoin into their economy. The exchange rates could be freely set up by the market.

El Salvador’s move to make the cryptocurrency a legal tender ensures the permanence of cryptocurrency in the world economy. It proves that cryptocurrency has the ability to bring about a paradigm shift in the near future even when countries including India are still debating the possibilities and capability of cryptocurrency.

Most banks in India and China still does not approve any transactions in the form of cryptocurrency. China had recently restricted its banks from providing any assistance to such transactions. This move by China had created a 50% downfall in the crypto market.

According to Shivam Thakral, CEO BuyUcoin, Indian investors believe that cryptocurrency can become a great financial tool in the long run and hence are investing in it. they are however not ready to view it as legal tender yet.

Cryptocurrencies are not like traditional currencies. Every dealings associated with it are done digitally. There are no authorities that regulate the currency like for Indian Rupee or US Dollar. Its transactions are monitored using internet by a large group of users. Cryptocurrency is a form of exchange that is decentralised and encrypted and is dealt completely through a digital platform.