El Salvador has passed a potentially ground-breaking bill that has made it the world’s first country to recognize bitcoin as legal tender.
At 62 out of 84 possible votes, El Salvador’s legislature passed the bill which would allow bitcoin to be legally used for purchases and tax payments while exchanges trading the cryptocurrency will also exempt from capital gains tax.
According to the law which is aimed at promoting economic growth, «it is necessary to authorize the circulation of a digital currency whose value answers exclusively to free-market criteria, in order to increase national wealth for the benefit of the greatest number of inhabitants».
Inclusion and Costs
The move to legalize bitcoin could have particularly potent returns for El Salvador by boosting financial inclusion and reducing the cost of moving funds.
70 percent of the population lacks access to traditional financial services and 20 percent of its GDP is reliant on remittances.
«History!» said 39-year old President Nayib Bukele whose party has control over the country’s legislature.
