REGULATION

Salvadoran Congress passes "Bitcoin Law," President reveals: Companies investing three bitcoins will receive permanent residency

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Salvadoran Congress passes "Bitcoin Law," President reveals: Companies investing three bitcoins will receive permanent residency

The Salvadoran Congress is expected to pass the Bitcoin Law with an absolute majority at around 2 p.m. Taiwan time, making it the world's first country to adopt Bitcoin as legal tender. Additionally, the law will grant permanent residency to crypto entrepreneurs, with the condition of investing in 3 bitcoins.

Bitcoin Becomes Legal Tender

Nayib Bukele earlier retweeted a video of the parliamentary vote on Twitter, with the official Twitter account of the Salvadoran Legislative Assembly stating:

In the seventh agenda of the full parliament, out of 84 votes, 62 voted in favor. The new law approves Bitcoin as the official circulating currency in El Salvador.

In a conversation on Twitter Spaces with 22,000 listeners today at noon, Nayib Bukele revealed that the law is effective immediately, and the necessary infrastructure will be in place within 90 days.

3 Bitcoins for Permanent Residency

According to the law, the government will provide infrastructure to allow Bitcoin users to convert Bitcoin to US dollars instantly when needed, and plans to offer training mechanisms to assist those unfamiliar with Bitcoin.

Additionally, the government will issue an official Bitcoin wallet and intends to hold the equivalent of $150 million in Bitcoin in its trust fund at the bank to mitigate merchant risks, while Nayib Bukele is set to meet with the International Monetary Fund (IMF) on Thursday.

Nayib Bukele also mentioned that entrepreneurs who invest 3 Bitcoins in El Salvador will receive permanent residency. When asked if Bitcoin will be held as a reserve asset, he stated:

I am not sure if this will develop quickly, but in the future, holding Bitcoin in reserve assets is not ruled out.

Is Bitcoin Adopted to Ditch the US Dollar?

Earlier reports indicated that George Selgin, the director of the Cato Institute, a major conservative think tank in the United States, pointed out that El Salvador adopted Bitcoin to reduce dependence on the US dollar, stating that "adopting Bitcoin as legal tender is a repetition of what El Salvador did with the US dollar in 2001."

However, despite adopting Bitcoin, Nayib Bukele does not intend for El Salvador to move towards de-dollarization. He mentioned:

We are not trying to de-dollarize because that makes no sense for us. Adopting Bitcoin helps to have both currencies as legal tender.