Attention, crypto-enthusiasts: not only has El Salvador become the first country in the world to approve Bitcoin as an official currency, but anyone who invests in at least three BTC tokens there can gain legal citizenship, too.
President Nayib Bukele made the surprise announcement via Twitter, separately stating that “the purpose of this law is to regulate Bitcoin as an unrestricted legal tender with liberating power, unlimited in any transaction”.
This means that Salvadorans will be able to make tax contributions with the cryptocurrency and exchanges made with Bitcoin won’t be subject to capital gains tax. As it stands, however, one Bitcoin is worth £24,064.82, so bagging yourself a citizenship to the Central American country won’t come cheap.
One of the main reasons El Salvador’s Congress passed this bill is because the country relies on US dollars as its official currency, while 70 per cent of the population doesn’t have access to traditional financial services.
The new law also states that El Salvador will “promote the necessary training and mechanisms so that the population can access Bitcoin transactions”. In the short term, this will generate jobs and provide financial inclusion to thousands outside the formal economy.
Don’t get your hopes up about the UK following suit, though. As of last year, the UK recognises crypto assets as property, though cryptocurrency itself is not considered legal tender – and we’re a long way off replacing fiat currency with a digital one. Back in April, the Bank of England announced that it was looking into creating its own “digital money” as a way of “avoiding the risks of new forms of private money creation,” which includes Bitcoin.
Probably best to keep your Monzo account open for now…