El Salvador makes it official – Bitcoin is now legal tender

El Salvador has become the first country to make Bitcoin legal tender, in a historic vote on Wednesday.

The legislative assembly voted 62-17 to pass the measure around 4pm AEST. BTC gained about US$700 after the vote.

Con 62 votos, el pleno legislativo aprueba la #LeyBitcoin con la que El Salvador adopta el #Bitcoin como moneda de circulación legal.

¡#LaNuevaAsamblea sigue haciendo historia! pic.twitter.com/Ur9OQzPvYI

— Asamblea Legislativa (@AsambleaSV) June 9, 2021

The law says that prices may be expressed in Bitcoin, that taxes may be paid in Bitcoin and that exchanges in Bitcoin are not subject to capital gains tax, “just like any legal tender”.

I’ve just sent the #BitcoinLaw to Congress pic.twitter.com/DljnxsXlyt

— Nayib Bukele (@nayibbukele) June 9, 2021

“For accounting purposes, the USD will be used as the reference currency,” but the state shall provide alternatives to allow users to carry out transactions in Bitcoin, the law says. (El Salvador has lacked its own currency since 2001, and uses the US dollar).

About 70 per cent of El Salvador’s population of 6.5 million don’t have a bank account. President Nayib Bukele has pledged to work with digital wallet company Strike to modernise the country’s financial infrastructure.

Passage was front-page news in El Salvador.

Tomorrow’s front page of the biggest newspaper in El Salvador.

Headline: ASAMBLEA APRUEBA A LEY BITCOIN

Translation: ASSEMBLY APPROVES THE BITCOIN LAW pic.twitter.com/kfutmeI2rR

— Lolli (@trylolli) June 9, 2021

Crypto enthusiasts from around the world tuned in to the vote on social media.

Regardless of long-term impact and outcome, today is an epoch-defining day for #Bitcoin and one that was completely inconceivable until quite recently.#ElSalvador #LeyBitcoin

— Gaurav Gollerkeri (@ggollerk) June 9, 2021