During the 2021 Bitcoin Conference recently held in Miami, one of the most amazing and disruptive announcements was that of El Salvador’s President Nayib Bukele.
His announcement that congress is voting to establish Bitcoin as a legal tender, and that the country will be creating a new monetary system based on the Bitcoin Standard, was the showstopper of the conference. The Shot Heard Round the World!
This unprecedented move to create Bitcoin as a legal tender will totally disrupt El Salvador’s current monetary system. El Salvador will adopt Bitcoin as its second native currency, on par with the U.S. Dollar. In case you’re not familiar with legal tender laws, allow
me to enlighten you.
Legal tender laws are designed to recognize what may be used as a medium of exchange. It not only regulates what consumers may use as a legal tender, but also requires all merchants to accept it for goods and commercial services.
A few days after the conference the El Salvadorian government passed the new law, which also eliminates capital gains taxes on the exchange of Bitcoin for transactions. Along with this, the presidents new law includes clean energy Bitcoin mining, done through their active volcanos.
And the final shot, a development bank will be created to custody $150 million in Bitcoin, that will allow merchants to instantly convert to USD … Bang! Bang! Bang!
I can’t begin to tell you how significant this is to the blockchain and cryptocurrency community. The move is historic, and the first time any sovereign nation has created a monetary system based on a cryptocurrency standard. It will be very interesting to see how El Salvador progresses with this move and see how the rest of the Central American countries react.
Author: Majeed A. Kariem, CBP
C4-Certified Bitcoin Professional | President, Blockchain Merchants Assoc.
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