El Salvador becomes the first country to adopt bitcoin as legal tender

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  • CNBC Television published this video item, entitled “El Salvador becomes the first country to adopt bitcoin as legal tender” – below is their description.

    El Salvador just became the first country to adopt bitcoin as legal tender. Lawmakers in the country voted by a supermajority in favor of the Bitcoin Law, which allows bitcoin to be used to show prices and pay tax contributions. The country’s president Nayib Bukele said he’s partnering with digital wallet company Strike to help build out the country’s modern financial infrastructure. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

    El Salvador has become the first country to adopt bitcoin as legal tender.

    Lawmakers in the Central American country’s Congress voted by a “supermajority” in favor of the Bitcoin Law, receiving 62 out of 84 of the legislature’s vote.

    The price of bitcoin was up 5% to $34,239.17 shortly after the vote.

    Earlier on Wednesday, President Nayib Bukele sent the law to Congress for a vote.

    “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 law reads.

    Prices can now be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.

    Bitcoin is known for wild price swings that have prompted critics to suggest it is not suitable to be an effective currency. It’s still unclear how El Salvador will ultimately roll out bitcoin as legal tender.

    The exchange rate with the U.S. dollar “will be freely established by the market,” according to the proposed law. El Salvador’s current official currency is the U.S. dollar.

    The law also says that the state will “promote the necessary training and mechanisms so that the population can access bitcoin transactions.”

    Approximately 70% of El Salvador does not have access to traditional financial services, according to the Bitcoin Law. The cryptocurrency is seen as a way to increase financial inclusion.

    Bukele submitted the law to Congress after he announced last week that El Salvador struck a partnership with digital wallet company Strike, to build the country’s modern financial infrastructure using bitcoin technology.

    In April, bitcoin hit a record high of $64,829.14 but has since dropped by nearly half, according to CoinDesk data. It is still up over 230% over the last 12 months. That rise has been attributed to several factors, including rising interest from institutional investors and large companies such as Tesla and Square buying bitcoin.

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    In This Story: Bitcoin

    Bitcoin is a cryptocurrency invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its implementation was released as open-source software. Bitcoin was the first decentralized cryptocurrency.

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    A cryptocurrency, crypto-currency, or crypto is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.

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  • In This Story: El Salvador

    El Salvador, officially the Republic of El Salvador (Spanish: República de El Salvador, literally “Republic of The Saviour”), is a country in Central America. El Salvador’s capital and largest city is San Salvador.

    The colón, the currency of El Salvador since 1892, was replaced by the United States dollar in 2001.

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