FX.co ★ El Salvador adopts bitcoin as legal tender

It has been a couple of weeks since El Salvador’s Congress officially approved President Nayib Bukele’s proposal to embrace bitcoin. This step has proved to be rather practical as the country's economy did not fall into a steep recession and the existing financial system did not collapse in an instant.

Notably, El Salvador has become the first country in the world to adopt the cryptocurrency as a means of payment. With 62 out of 84 possible votes, Congress voted by an almost absolute majority in favor of the Bitcoin Law.

"The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out," the law says.

Having become legal tender, the first cryptocurrency has significantly expanded the territory of its circulation. Local sellers can now set prices in bitcoin, taxes and other government fees can be paid with the digital currency, and exchanges in BTC will not be subject to capital gains tax. According to the law, the exchange rate against the US dollar "will be freely established by the market." Besides, the state plans to "promote the necessary training and mechanisms so that the population can access bitcoin transactions."

The country's President Nayib Bukele sees the use of the virtual currency as a very promising move. "In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy," he added.