The bill introduced by the president of El Salvador to make Bitcoin (BTC) legal tender in the nation passed the Legislative Assembly with a supermajority just before 6:00 am UTC.
In a Twitter Spaces conversation with 22,000 listeners that began just after 5:00 am UTC, President Nayib Bukele said he would sign off on the historic law later that night or first thing the next day.
“It goes into effect immediately,” he said, clarifying the government would allow 90 days for the infrastructure to be put into place.
He said that accepting Bitcoin would be mandatory for all businesses. “They have to take it by law,” he said of merchants in the country. “If you go to Mexico, they have to take your pesos.”
“In the case of El Salvador, Bitcoin is going to be legal tender just as the U.S. dollar.”
He revealed that he will be meeting with the International Monetary Fund on Thursday. The government will also be releasing an official Bitcoin wallet, although it will not be mandatory. The government intends to hold $150 million in a trust fund in its development bank to assume merchant risks.
Permanent residency will be available for those who invest 3 BTC in El Salvador. Asked if the country would put Bitcoin in its reserve, he said there were no immediate plans:
“I don’t know — this is evolving very fast. We’re not ruling out having Bitcoin in our reserves in the near future.”
The president said he hadn’t thought about Bitcoin mining but was favorably disposed toward the idea of renewable energy-based Bitcoin mining.
The "Bitcoin Law" took the form of a bill submitted on Wednesday after Bukele tweeted, “I’ve just sent the #BitcoinLaw to Congress,” and uploaded copies of the bill in Spanish and English.
“The purpose of this law is to regulate Bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the bill reads.
The bill includes a list of interesting proposals such as zero capital gains tax on BTC, allowing tax payments in BTC, and that economic agents “must” accept BTC as payment when offered by “whoever acquires a good or service.”
La #ComisiónFinanciera emite dictamen favorable a la iniciativa del Presidente de la República @nayibbukele en el sentido se apruebe la #LeyBitcoin que le permitirá al país reconocer al #Bitcoin como moneda de curso legal. pic.twitter.com/hPh0OfVgJB— Asamblea Legislativa (@AsambleaSV) June 9, 2021
According to the bill, the state will provide the infrastructure that enables Bitcoin users to instantly convert their BTC to U.S. dollars if need be. Additionally, the state will provide “training and mechanisms” to aid citizens unfamiliar with Bitcoin — as many will need to learn how to use the digital asset.
Interestingly, following Bukele’s latest announcement, he changed his Twitter profile picture to one that features blue laser eyes, as opposed to the red ones usually found with the iconic crypto meme.
Bukele’s progressive crypto move has sparked enthusiasm among a number of politicians throughout Latin America who have either touted crypto proposals of their own or donned red laser eyes in support of crypto.
On Monday, Paraguayan congressmember Carlitos Rejala posted a photo with laser eyes and promised a Bitcoin-related announcement later this week.
The following day, Mexican senator Eduardo Murat Hinojosa revealed his plans of “promoting and proposing a legal framework for crypto coins in Mexico’s lower house.”
Gabriel Silva, a Panamanian congressmember, also stated plans to submit a pro-crypto bill.
The president of El Salvador @nayibbukele is on Twitter spaces right talking about the Bitcoin bill that's about to pass— ChainLinkGod.eth 2.0 (@ChainLinkGod) June 9, 2021
The government is going to create a Bitcoin wallet for merchants (opt-in, can use any wallet)
Accepting Bitcoin is a mandate by lawhttps://t.co/He2u1HQiXN