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Traders in the municipality of Chiltiupan in the southwest of El Salvador: Bitcoin is accepted here
Photo: Camilo Freedman / imago images / ZUMA Wire
In El Salvador, the Bitcoin is to be considered legal tender in the future.
The MPs of the Central American country passed a corresponding law on Tuesday that should enable the use of the extremely volatile cryptocurrency in many areas of public life.
This makes El Salvador the first country in the world to allow Bitcoin as legal tender.
The main currency of the country so far is the US dollar.
"The #Bitcoin law has just been passed with a qualified majority," said President Nayib Bukele after the vote on Tuesday on Twitter. "Historic!" He added. The 39-year-old president, who likes to pose as a modern and unconventional head of state, said before the vote that the introduction of Bitcoin as a means of payment would bring "financial inclusion, investment, tourism, innovation and economic development" to El Salvador.
The ruling party “Nuevas Ideas” (New Ideas) has had a two-thirds majority in parliament, which consists of only one chamber, since May.
Opposition parties criticized the speed of the advance.
The law stipulates that every trader who is technically capable of doing so must accept Bitcoin as a means of payment.
Taxes can also be paid in the cryptocurrency.
No capital gains tax should be levied on the exchange of bitcoins.
Cryptocurrencies are enjoying growing popularity due to their value, the anonymity they offer users and the large price fluctuations that promise high profits.
However, it is precisely because of these price fluctuations and the unclear legal situation that the use of Bitcoin as a traditional currency in everyday transactions is questioned again and again.
But head of state Bukele praised the fact that, thanks to Bitcoin, billions of dollars could be transferred to El Salvador without large amounts being lost to intermediary service providers.
The country's economy is heavily dependent on remittances from abroad.
Remittances from Salvadorans from abroad make up around 22 percent of gross domestic product.
According to official statistics, transfers totaled $ 5.9 billion (around 4.8 billion euros) in 2020.
The crypto market grew to over $ 2.5 trillion in mid-May 2020, according to the Coinmarketcap website, driven by investors on Wall Street and in Silicon Valley.
Between the beginning of 2020 and the peak of $ 68,870 in mid-April, the value of the cryptocurrency rose nearly 800 percent.
Since then, however, Bitcoin has lost around 50 percent of its value.
The price recently fell sharply towards the symbolic mark of $ 30,000 and also dragged the price of other cryptocurrencies down.
After the vote in El Salvador, the Bitcoin price rose by five percent.
nek / afp
