El Salvador became the first country to adopt bitcoin as legal tender. The Congress of EL Salvador favoured the Bitcoin law by supermajority, 62 out of 84 of the Legislature’s vote.
The price of the Bitcoin was up at 5% to $34,239.17 just after the law passed.
On June 9, President Nayib Bukele sent the law to the country’s Congress for the vote.
The Law read, “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.”
Post the implementation of the Law, prices can be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.
Bitcoin is infamous for its absurd price swings, this fact has prompted critics to suggest that it is not a suitable to be an effective currency.
According to the proposed law, the exchange rate with the U.S. Dollar will be freely determined by the market.
Furthermore, it states that the state will promote the necessary training and mechanisms so that the population can access bitcoin transactions.
The proposal will need to go through El Salvador’s legislative process before being passed as law.