El Salvador’s bitcoin bill would require businesses to accept payment in the cryptocurrency, a draft version published Tuesday night said.
The bill, proposed by El Salvador President Nayib Bukele, will treat bitcoin as legal tender, alongside to the U.S. dollar, if adopted by Congress and passed into law, according to a Google translation. Bukele announced his intention to launch the bill on Saturday at the Bitcoin Miami conference with Strike founder Jack Mallers.
“In order to promote the economic growth of the country, it is necessary to authorize the circulation of a digital currency whose value obeys exclusively free market criteria, in order to increase national wealth for the benefit of the greatest number of inhabitants,” the bill said.
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Under the provisions of the bill:
- Goods may be priced in bitcoin
- Tax may be paid in bitcoin
- Bitcoin transactions will not face a capital gains tax
- The U.S. dollar will remain the reference currency for the bitcoin price
- Bitcoin must be accepted as a form of payment by “every economic agent”
- The government will “provide alternatives” to enable crypto transactions
The bill noted that 70% of El Salvador’s population lacks access to financial services, and said the federal government will “promote the necessary training and mechanisms” to allow the population access to the cryptocurrency.
The government will also create a trust at the Development Bank of El Salvador which will enable the “instantaneous convertibility of bitcoin to dollar,” the bill said.
The bill is expected to easily pass through the legislature, after Bukele’s New Ideas party and allies won a supermajority in the Congress earlier this year.
“[It] is the obligation of the State to facilitate the financial inclusion of its citizens in order to better guarantee their rights,” the bill said.