El Salvador does it. The Latin American country has become the world's first to approve Bitcoin as legal tender. Further, bitcoin investors won't face capital gains tax in El Salvador. The country also promises immediate permanent residency for cryptocurrency entrepreneurs.
The bill seeking approval of the proposals, moved by El Salvador President Nayib Bukele, was passed by a majority of the lawmakers. The bill was passed after getting 62 out of possible 84 votes.
“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. Following this move, citizens of El Salvador will be able to show prices in bitcoin. They will also be allowed to make tax contributions with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.
The incentives for the crypto community has attracted attention from investors and entrepreneurs alike.
President Bukele's tweet listing the announcements received an enthusiastic response from investors and entrepreneurs like cryptocurrency platform Tron founder Justin Sun, and Changpeng Zhao, the CEO of the world's largest cryptocurrency exchange, Binance.
"It will bring financial inclusion, investment, tourism, innovation and economic development for our country," Bukele said in a tweet.
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Interestingly, the development comes at a time when countries are increasing scrutiny on cryptocurrency transactions across the world. China recently banned Chinese banks and financial institutions from offering any service concerning cryptocurrency transactions. In India, too, there is a lack of regulatory clarity on cryptocurrencies.
Bitcoin price in India stands at more than Rs 24.14 lakh.