El Salvador's President Nayib Bukele has finally announced that the country recognizes Bitcoin as legal currency, making it the first country in the world to officially adopt an exclusively digital currency.
After a vote in the Congress of the Central American country, "the Bitcoin Law" was voted by a majority of 62 out of 84 votes in favor. This new law represents that Bitcoin will join the US dollar as the official currency of the nation, that is, it will be usable as payment for basic goods and services in the country; but it will not be subject to capital gains tax as is the case in the United States, for example.
"The government will guarantee the conversion rate to the exact equivalent in US dollars at the time of each transaction," the authorities explained. "This, in turn, will bring financial inclusion, investment, tourism, innovation and economic development to our country. Let no one tell us that we are too small to [dream] that big."
The rise of cryptocurrencies
El Salvador's new Bitcoin law places it at the opposite end of the spectrum from China and India, which have recently placed restrictions on digital currency trading, as the Chinese government has cracked down on cryptocurrencies by banning institutions financial companies offer services with digital currencies and India announced a ban in March on any possession related to cryptocurrencies.
