El Salvador, a Central American nation, has approved Bitcoin as a form of legal tender.
El Salvador’s legislature approved a bill submitted by President Nayib Bukele that would allow the Latin American country to embrace Bitcoin on Wednesday.
Despite the fact that three members of the legislature were missing during the voting, 19 parliamentarians voted against the measure, while 62 voted in favour.
According to Bukele, the new legislation would promote financial inclusion since an estimated 70% of the country’s population lacks access to conventional financial services.
“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 reads.
“The exchange rate between bitcoin and the United States dollar, subsequently USD, will be freely established by the market.
“Prices may be expressed in bitcoin. Tax contributions can be paid in bitcoin. Exchanges in bitcoin will not be subject to capital gains tax, just like any legal tender.
“For accounting purposes, the USD will be used as the reference currency. Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service.
“Without prejudice to the actions of the private sector, the State shall provide alternatives that allow the user to carry out transactions in bitcoin and have automatic and instant convertibility from bitcoin to USD if they wish.
“Furthermore, the State will promote the necessary training and mechanisms so that the population can access bitcoin transactions.”
According to the new rule, when a buyer of an item or service offers bitcoin as a means of payment, all economic agents must accept it.
It also mentions that bitcoin may now be used to pay taxes.
El Salvador, according to the World Bank, has a population of 6.4 million people (plus almost 1.5 million Salvadorans residing abroad) and is one of the most densely populated nations in the world, ranking in the 83rd percentile for population density.
While El Salvador made history by becoming the first government to recognise Bitcoin as legal cash, many other nations, including Nigeria, have continued to implement anti-crypto measures.
The Chinese government said in May that it will tighten down on Bitcoin mining and trade.
Weibo, a Chinese microblogging website akin to Twitter, suspended a number of cryptocurrency-related accounts over the weekend.