Salvadoran President includes Bitcoin as legal tender "He is just evading US sanctions"

(This article is authorized for reprint from Vision News. For the original article, please refer to the source.)

（This article is authorized to be reprinted from Horizon Next Sumari News, original article here）

At the Bitcoin 2021 conference in Miami, Salvadoran President Nayib Bukele announced that Bitcoin will be recognized as legal tender. Bukele's move means that once Bitcoin becomes legal tender, debts can be signed in Bitcoin, settlements can be made in Bitcoin, and banks will be allowed to transact in Bitcoin.

Furthermore, Bukele announced on Twitter that Bitcoin will not be subject to capital gains taxes as it will be legal tender. Bukele also changed his profile picture to a laser eyes image.

1. Great weather, world class surfing beaches, beach front properties for sale.
2. One of the few countries in the world with no property tax.
3. No capital gains tax for #Bitcoin, since it will be a legal currency.
4. Immediate permanent residence for crypto entrepreneurs. https://t.co/j3eugJQCMd

— Nayib Bukele (@nayibbukele) June 6, 2021

Observers speculate that Bukele's actions are aimed at encouraging Salvadorans working abroad to quickly remit money back to El Salvador.

Bukele pointed out that only 30% of Salvadorans have bank accounts, making remittances in legal tender currencies costly, with remittances accounting for 21% of the country's GDP, posing a significant issue.

However, according to Decrypt report, George Selgin from the Cato Institute mentioned that Bitcoin will not become El Salvador's everyday currency and is unrelated to remittances and daily payments. Selgin believes that Bukele may be seeking to "Bitcoinize" the country to reduce reliance on the US dollar. Selgin says that the bill also allows Salvadorans to repay debts in Bitcoin and may allow banks to transact, accept deposits, and lend in cryptocurrencies.

El Salvador has faced severe inflation over the years, leading to the near collapse of its legal tender currency. In an effort to salvage the economy and reverse the decline, El Salvador adopted the US dollar as legal tender. Selgin stated, "The president's proposal to use Bitcoin as legal tender is a repeat of El Salvador's 2001 adoption of the dollar."

He believes that since El Salvador's own currency has been abolished and people have shifted to using the US dollar, allowing individuals to freely choose between two legally equivalent currency options will not result in any loss. In other words, Bukele is unlikely to adopt decentralized finance and abolish the country's central bank to align with the core principles of Bitcoin due to using Bitcoin.

Turning to Bitcoin is simply a way for El Salvador to circumvent sanctions from the Biden administration, similar to Iran.

Selgin mentioned that elevating Bitcoin to legal tender status is a way to prevent the inflow of dollars into the country, therefore El Salvador is unlikely to become a Bitcoin nation as a result.