El Salvador has ratified the plan to eliminate any taxes related to various technological innovations. This includes AI, computer programming, and app development. It is a surefire way to generate innovation and encourage multi-billion-dollar companies to establish their base in your country. While the idea of swapping Silicon Valley for San Salvador might not immediately get tech executives sitting up and taking notice.
El Salvador, which became the first country in the world to recognise Bitcoin as a legal tender two years ago, approved a law in January that regulates the issuance of other digital assets by both the state and private entities.
The bill was backed by ruling party lawmakers allied with President Nayib Bukele and aimed to attract national and foreign investors while creating new financing opportunities for citizens, companies and the government.
The law also established the creation of the National Commission for Digital Assets and the Bitcoin Funds Administration Agency, which will be in charge of managing, safeguarding, and investing the funds from public offerings of digital assets carried out by the government. The provisions of the law do not apply to digital currencies issued by central banks of any country or territory, whether so-called fiat currency issued by those banks or cryptocurrencies. El Salvador is the world’s leading country in embracing Bitcoin and digital assets. Moreover, it is one of only two countries where you can use Bitcoin as a legal tender.
World-leading tech companies specializing in cryptocurrency will also be eyeing up the switch as the Central American country looks to establish itself on the world stage. He has enormous approval ratings and has essentially the entrenched and systemic gang activity that made San Salvador one of the world’s most dangerous cities just eight years ago.
Also, in 2021, El Salvador’s government published in the official gazette the legislation making the digital currency Bitcoin legal tender within the country. The legislation went into effect on September 7th, 2021. With El Salvador being the first country in the world to formally make Bitcoin a legal tender it is too soon to tell what the implications are globally, but one thing is for sure this is the first domino to fall in broader global adoption. Although America is silently countering the expansion of digital casinos where some states are implementing stringent laws, some states are outlawing it. However, it is not the same for El Salvador.
Bitcoin as a legal tender brings new business opportunities, not only in El Salvador but globally. Indeed, If Salvadorans will use Bitcoin to receive remittances, it means that senders from other countries will require enablement services to exchange local currencies with Bitcoin and send them over the Lightning network to El Salvador, so they will need banking services as well. It remains to be seen whether the traditional actors who today hold the power in the remittances market will offer new crypto services themselves or will the new incumbents offer this type of service.
