Crypto Legalization In El Salvador
Legalization of crypto assets has always been a debatable topic. Many industry experts are against it because of its volatility, while some others think that inclusion and legalization is the way to go. With each passing year, the number of investors are increasing in the industry, so are the entrepreneurship activities. Considering all this, today the crypto industry has become an important area to be considered as a viable industry, that requires some policy framework and central regulation.
Well, El Salvador knows this very well and is going way ahead in its crypto game. Its President- Nayib Bukele had announced that Bitcoin is legal tender in the country last year, making it the first country to accept Bitcoin as a legal tender. Legal tender is such a form of currency which is used as a streamlined source of payments and financial transactions and has the backing of the government too. Though the International Monetary Fund advised El Salvador to undo this decision, it was not implemented. In fact, now the President has recently announced the plans of Bitcoin backed bonds. The hopes are that this 10-year long bond will help the country elevate its Bitcoin holdings and also support the glamorous Bitcoin city plans.
Also Read: Crypto Taxation In The US
In order to boost entrepreneurship within the crypto industry, he also revealed that there will not be capital tax on the gains of Bitcoin. In general, capital tax is such a tax that is levied on the profits of such assets that are held for at least a year. El Salvador is so serious about its crypto aspirations, that the country is even ready to offer residence to those entrepreneurs willing to build a startup in the crypto industry. As President Bukele has more than 70% majority in El Salvador’s Legislative Assembly, his announcements are much likely to become laws in near time.
Some countries like India, China have announced plans to bring in their own digital currency, the US still has ambiguous taxation and regulatory framework in the arena. With this, El Salvador going about with this plan will not only boost the crypto industry but also might lead to it becoming a safe haven for entrepreneurs interested in the field.