The latest news on the Bitcoin adoption phenomenon in El Salvador suggests investors with Bitcoin assets will actually get tax relief directly from that government as part of a greater plan to integrate the cryptocurrency into the national economy.
“If a person has assets in Bitcoin and makes high profits, there will be no tax. This is done obviously to encourage foreign investment,” Javier Argueta said, according to reporting by Agence France-Presse, relayed by Helen Partz at Cointelegraph. Argueta, a legal adviser to President Nayib Bukele, has a front-row seat to this unusual accommodation of a global cryptocurrency against a backdrop of nationalist fiat-protection efforts playing out elsewhere around the world.
As part of the initiative, El Salvador is also requiring all merchants to deal with Bitcoin, although third-party systems exist for converting from dollars at time of purchase. Investors will also get a one-time $30 payment for activating a crypto wallet, which the government will reportedly monitor for different kinds of potential criminal activity.
“The Chivo wallet would also temporarily halt Bitcoin transactions on the application if Bitcoin value collapsed to minimize the impact of extreme volatility or price fluctuations,” Partz reports.
Bucking some reluctance from backers like the World Bank, El Salvador became the first country to really adopt Bitcoin as legal tender and a national currency in past weeks.
Surprisingly, studies of the citizenry have found that around 70% oppose making Bitcoin the coin of the realm.
“An opinion poll by the Central American University found that more than 80 percent of respondents were wary of the new currency, and 70 percent were opposed to making it legal tender,” write Moises Avila and Carlos Mario Marquez at TechXplore. “Nearly two-thirds said they had no interest in downloading the Chivo wallet. The government has not released figures on uptake.”
However, detractors aside, this plan is happening. Crypto investors, take note.