El Salvador First Country to Accept Bitcoin as Legal Tender
El Salvador has become the first country in the world to accept Bitcoin (BTC) as a form of legal tender, under a new law championed by the country’s President, Nayib Bukele, and passed by the country’s Congress.
Most regulators have classified BTC as an asset, not as legal tender, meaning profits made by holding the cryptocurrency are subject to capital gains tax upon withdrawal.
Under the new law, BTC can now be used along the same lines as regular currency in El Salvador.
“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.
Prices can now 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.