El Salvador's parliament approved President Nayid Bukele's bill to legalize bitcoins, making it the first country in the world to use cryptocurrency as real currency.
"The #BitcoinLaw has just been approved by a qualified majority by the Assembly," the president wrote on Twitter immediately after the vote.
The intention to make the circulation of bitcoin legal in El Salvador was anticipated days ago by President Nayib Bukele in a video message to the Bitcoin 2021 conference in Miami, Florida.
In a very short time, the bill was transmitted and discussed in the Finance Committee of the National Assembly, and then approved without debate by the Parliament largely controlled by the parties that support Bukele. According to the new law, the use of bitcoin will be "free with liberating power, unlimited in any transaction and for any reason required by public or private individuals or legal entities". In the discussion that took place in the Finance Committee, it was made clear that bitcoin will not replace the dollar. It is, underlined the vice-president of the government party 'Nuevas Ideas', "only an additional value". The exchange rate between bitcoin and dollar is expected to be freely fixed by the market, that prices can be expressed in bitcoin,and that all taxes and duties can also be paid with cryptocurrency.
Importantly, exchanges made in bitcoin will not be subject to capital gains tax as is the case with any other legal tender currency.