Bitcoin investors exempt from taxes in El Salvador; Brazilians want BTC adoption
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El Salvador is reportedly planning to give major tax breaks to Bitcoin investors. Meanwhile, almost half of Brazilians surveyed want to see BTC adoption.
Javier Argueta, a legal adviser to El Salvador President Nayib Bukele, is aiming to encourage foreign investment in the country through a Bitcoin (BTC) tax-break scheme, according to a recent Agence France-Presse (AFP) article.
El Salvador will exempt foreign investors from taxes on profits on #bitcoin in the country.
“If a person has assets in bitcoin and makes high profits, there will be no tax,” said Javier Argueta, legal adviser to President Nayib Bukele. pic.twitter.com/H2XHVcuOrQ
— Bloqport (@Bloqport) September 13, 2021
“If a person has assets in Bitcoin and makes high profits, there will be no tax,” Argueta told AFP.
“This is done obviously to encourage foreign investment,” Argueta said, adding that El Salvador will impose no taxes on “either the capital increase or the income.”
El Salvador introduced Bitcoin as legal tender last week alongside the US dollar – the nation’s official currency for the past 20 years. The law came into effect on what has been referred to as “Bitcoin Day”, coinciding with a dramatic BTC dump from which the entire crypto market is still attempting to recover, or at least stabilise.
Argueta also highlighted how the Salvadoran government plans to address concerns about Bitcoin’s volatility, potential impact on price inflation and the idea of it being used for nefarious purposes, such as money laundering.
He noted that the government has the capacity to actively trace Bitcoin transactions on the country’s official Bitcoin wallet, Chivo, in order to combat illegal usage.
“We are implementing a series of recommendations from international institutions against money laundering,” the president’s legal adviser said.
He also told AFP that, in order minimise extreme volatility and price fluctuations, the Chivo wallet can also temporarily halt Bitcoin transactions in the event of BTC’s value collapsing.
The Salvadoran government’s chief aims in adopting Bitcoin as legal tender are supposedly two-fold. It seeks to “bank the unbank”, that is, to give citizens banking services for the first time (through the Chivo wallet).
And it wants to bring independent financial stability to the nation in an attempt to loosen the ties it has to the sinking performance of the US dollar. According to the AFP article,El Salvador hopes to shave off millions of dollars off commissions on remittances sent home from abroad.
Data gathered by Brazilian digital marketing agency Sherlock Communications and research platform Toluna, has found that 48 per cent of Brazilians surveyed want their country to adopt Bitcoin.
As reported by Brazilian news outlet Valor Invest and Bitcoin Magazine, 31 per cent of the 2,700 people surveyed agreed that Bitcoin should be a legal currency in Brazil and other Latin American countries, while 17 per cent “strongly agreed”.
The study also included participants from Argentina, Colombia, Costa Rica, El Salvador, Venezuela, and Mexico.
48% of Brazilians want to make #Bitcoin a legal currency 🇧🇷
— Bitcoin Magazine (@BitcoinMagazine) September 10, 2021
“Brazilians were the biggest supporters of recognising Bitcoin in the region, with 56% supporting El Salvador’s approach and 48% saying they want Brazil to adopt it too,” said the study.
Only 4 per cent of survey participants believed that Bitcoin has “no future” in Brazil.
Luiz Eduardo Abreu Haddad, a consultant for Sherlock, said that the Bitcoin market looks like it is set to keep growing in Latin America.
“In Brazil, friendlier regulation has attracted institutional investors and corporations to the sector,” he said.
“El Salvador’s experiment could become a big reference for Latin American countries on how to incorporate blockchain and cryptocurrencies to their economies and generate greater well-being to its citizens.”