btc-usdArslan Butt•Saturday, February 15, 2025•3 min read Add an article to your Reading ListRegister now to be able to add articles to your reading
btc-usd
Arslan Butt•Saturday, February 15, 2025•3 min read
Add an article to your Reading List
Register now to be able to add articles to your reading list.
”
aria-hidden=”true”>
Share in Facebook
“>
El Salvador’s Bitcoin Law changes have caused a lot of confusion around whether Bitcoin is still legal tender in the country.
Samson Mow, CEO of JAN3, a Bitcoin focused tech company, took to social media to break it down.
Bitcoin is still legal tender but no longer a currency. This means Bitcoin transactions are voluntary not mandatory raising questions about the future of BTC adoption in El Salvador.
Key Takeaways:
- Bitcoin remains legal tender in El Salvador but is no longer classified as a currency.
- Businesses are no longer required to accept BTC; government payments in BTC are discontinued.
- El Salvador aligns with IMF requirements, but Bitcoin adoption may slow.
Bitcoin: Legal Tender, But Not Currency?
The latest changes to the Bitcoin Law redefine Bitcoin’s status. Before Bitcoin was considered both a currency and legal tender, meaning businesses had to accept it. Now, while it’s still legal tender it’s no longer a currency.
Samson Mow explains:
“Bitcoin both is and isn’t legal tender.”
The distinction is crucial because, under the new rules:
- Bitcoin transactions are still tax exempt, no capital gains tax.
- Businesses can choose to accept BTC, no longer required.
- Government is no longer required to facilitate BTC transactions, so Chivo Wallet might be phased out.
It aligns with IMF requirements so El Salvador can comply with global financial agreements and keep Bitcoin as legal tender.
BTC/USD
Major Changes in the Bitcoin Law
Samson Mow’s breakdown of the law changes highlights the main differences for Bitcoin in government payments, taxation and business acceptance:
Article 3: Bitcoin for Payments
- Before you could price goods directly in BTC.
- Now you must convert fiat price to BTC before processing payments.
- Customers cannot price goods in Satoshis (sats), they must be listed in fiat.
Article 4: Government Payments in BTC
- Taxes can no longer be paid in Bitcoin.
- Government will no longer accept BTC for company registrations, passport fees or future citizenship-by-investment programs.
- The $12 airport entry fee must be paid in fiat.
Article 8: State’s Role in Bitcoin Transactions
- The government is no longer responsible for facilitating BTC transactions.
- This paves the way for the potential removal of Chivo Wallet, the state-run BTC payment platform.
These changes reduce government involvement in Bitcoin transactions, leaving adoption in the hands of businesses and individuals.
What Does This Mean for Bitcoin Adoption?
El Salvador was the first country in the world to make Bitcoin legal tender but these changes weaken its position in the global crypto space. Samson Mow said:
“The weakening of the Bitcoin Law makes El Salvador a bit less unique.”
While El Salvador still recognizes Bitcoin as legal tender, the new law removes the obligation for businesses and the state to use it. This will slow down BTC adoption for daily transactions but allows El Salvador to comply with IMF and keep its Bitcoin reserves.
Meanwhile other jurisdictions are Bitcoin friendly:
- Bhutan holds Bitcoin in its national reserves.
- Próspera (Honduras) still treats Bitcoin as legal tender.
- Hong Kong, Dubai, Singapore and Switzerland (Lugano) have no capital gains tax on Bitcoin.
- Madeira and Czech Republic have tax exemption on BTC after certain holding periods.
El Salvador’s Bitcoin experiment continues but now it faces competition from other regions positioning themselves as crypto friendly financial hubs.
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
www.fxleaders.com