By Jennifer Ugwueke
El Salvador, a Country in Central America, has become the first Country in the world to officially adopt Bitcoin as a legal tender.
The Country’s President, Nayib Bukele, through his official Twitter handle announced the development early Wednesday, and said he has sent a bill to the Country’s parliament for a vote.
Lawmakers in the Central American Country voted by a “supermajority” in favour of the Bitcoin Law, which received 62 out of 84 of the legislature’s vote. The price of bitcoin was up 5 per cent to $34,239.17 shortly after the 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 document posted by Mr Bukele reads in part.
By implication, 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.
In the past weeks and months, the world’s most popular cryptocurrency, Bitcoin, has faced significant criticism and profound market sentiments across the globe that has greatly influenced the market price of the currency.
The unusual price swings of Bitcoins noticed since the beginning of the year have also prompted critics to suggest it is not suitable to be an effective and sustainable currency for adoption as a fiat.
While it is still unclear how El Salvador will ultimately roll out its bitcoin as a legal tender plan, countries across the globe are yet to come up with effective and efficient means of regulating the cryptocurrency space conceived to be a money laundering den and a tool for terrorists.
On February 5, the Central Bank of Nigeria (CBN) directed banks in the Country to close all cryptocurrency-related accounts.
The bank claimed it banned cryptocurrency-related transactions in the Country because digital currency is used for “money laundering and terrorism.” Nigeria is the world’s second-biggest user of virtual currencies like Bitcoins.
The price of Bitcoin has increased by 6.87 per cent in the last 24-hour. The coin experienced a low of $31,114 and oscillated to a high of $35,389.88 before settling at $34,965.22 on Wednesday at 02.54 PM Nigerian time.
In April, bitcoin touched an all-time-high record of $64,829.14 but has since dropped by nearly half, coinmarketcap.com data showed.
The sudden rise was attributed to the adoption of the currency by highly profiled individuals, investors, and large companies such as Tesla and Square buying bitcoin.