El Salvador becomes the first country to adopt Bitcoin as legal tender
During an early vote on June 9, the bill was passed with 62 out of 84 Congress members voting in favor.
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El Salvador has made history, becoming the first country in the world to recognize Bitcoin as an official form of currency.
On the morning of June 9, a supermajority of the nation’s legislative assembly voted in favor of the proposal for the country to adopt bitcoin as a legal tender.
The official vote came down to 62 members in favor, 19 in opposition, and three abstentions.
Shortly after the vote, Salvadoran President Nayib Bukele quickly took to Twitter to confirm the news.
In a brief pre-recorded video played during the 2021 Bitcoin Conference this past weekend, Bukele expressed what adopting Bitcoin as a legal tender would do for the nation.
“In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy,” he said.
“And in the medium and long term, we hope that this small decision can help us push humanity at least a tiny bit into the right direction.”
El Salvador is the smallest country in Central America, and 70% of Salvadorans do not have a bank account or traditional financial services. In 2019, the country’s GDP was at $27 billion, making it one of the most economically-challenged countries in the region, with nearly 40% of the population living below the poverty line.
Now that the bill has officially been passed, Bitcoin will soon be regulated as an unrestricted legal tender with “liberating power, unlimited in any transaction,” the law reads.
In addition, prices may be expressed in bitcoin, tax payments can be paid in Bitcoin and exchanges in Bitcoin will not be subject to capital gains tax.
El Salvador has used the U.S. dollar as its official currency since 2001.
The country’s passing of the Bitcoin bill could set the stage for many other countries to follow suit in adopting other crypto currencies as legal tenders. Other Latin American countries, such as Panama and Brazil, have recently expressed interest in potentially doing so.
The law is set to officially take into effect in 90 days.