Quote:On Wednesday, El Salvador’s president signed into law a proposal to adopt bitcoin as legal tender, making the Central American nation the first in the world to officially use the cryptocurrency.

The new law says that companies must accept bitcoin as a form of payment, and the government will allow people to pay taxes with it as well. The exchange rate with the dollar will be set by the market, and exchanges from dollars to bitcoin won’t be subject to capital gains tax. The law was passed by a supermajority vote of the legislature, with 62 of 84 deputies assenting.

President Nayib Bukele said the new law would make it easier for Salvadorans living abroad to send remittances back to friends and family in the country. Some $6 billion in remittances flowed into the Salvadoran economy last year, accounting for nearly a quarter of the country’s gross domestic product. Around 70 percent of Salvadorans lack access to traditional banking and other financial services within the country, the president said. The 39-year-old leader hopes that sending remittances will become cheaper, too. Last year, the average fee was 3 percent per transaction. Eliminating that fee would net Salvadorans an additional $180 million.

(06-09-2021, 09:23 PM)Nyx Wrote: The idea that businesses will be forced to accept the coins seems kind of outrageous to me, especially considering the state of the country I doubt many people are in a position to accept the coin and also just bite the bullet on the exchange rate every day. The remittance part will be nice for everyday workers abroad sending money home as it will be far faster though, especially considering it accounts for 25% of their GDP which is insane.

Seems to me though the key reason that this is being passed into law is more than likely the tid-bit where any crypto gains are exempt from capital gains taxes. I'm assuming a lot of the rich El Salvadorians are going to be milking crypto as their new tax haven/money laundering scheme that in some years goes +2000% while many citizens simply won't even have access to a wallet, further driving them into poverty. I suppose we'll see though.

(06-10-2021, 05:22 AM)Dismas Wrote:

(06-09-2021, 09:23 PM)Nyx Wrote: The idea that businesses will be forced to accept the coins seems kind of outrageous to me, especially considering the state of the country I doubt many people are in a position to accept the coin and also just bite the bullet on the exchange rate every day. The remittance part will be nice for everyday workers abroad sending money home as it will be far faster though, especially considering it accounts for 25% of their GDP which is insane.

Seems to me though the key reason that this is being passed into law is more than likely the tid-bit where any crypto gains are exempt from capital gains taxes. I'm assuming a lot of the rich El Salvadorians are going to be milking crypto as their new tax haven/money laundering scheme that in some years goes +2000% while many citizens simply won't even have access to a wallet, further driving them into poverty. I suppose we'll see though.

That was my primary thought. When the minimum wage there is ~$300 a month, there's no way the average person can afford fees on transactions. In addition, fluctuation of value will hurt businesses if they aren't swift at exchanging. BTC's biggest flaw will always be scalability.