El Salvador Announces Tax Exemption on Bitcoin Profits

Last week, El Salvador recognized Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term as legal tender in the country. Now, the Central American nation announced that it is planning to attract international crypto companies and Bitcoin investors through an exemption on BTC profits.

According to a report published by AFP, the country will exempt foreign investors from taxes on the capital increase or the income related to Bitcoin. "If a person has assets in bitcoin and makes high profits, there will be no tax. This (is done) obviously to encourage foreign investment. There will be no taxes to pay on either the capital increase or the income," Javier Argueta, legal adviser to President Nayib Bukele, told AFP.

On September 7, Nayib Bukele announced the purchase of 150 Bitcoin and mentioned that the country holds 550 BTC. The current value of El Salvador’s BTC holdings stands at around $24 million. The country received immense support from the global crypto community after the recognition of Bitcoin as legal tender in the region.

However, regulatory authorities around the world raised some serious concerns about El Salvador’s recent BTC adoption. In the latest discussion with AFP, Argueta highlighted the country’s efforts to eliminate the use of Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term in illegal activities. "We are implementing a series of recommendations from international institutions against money laundering," Argueta said.

Bitcoin’s Price Action

Last week, BTC saw a surge in volatility as its price dropped from $52,000 to as low as $43,000 within 12 hours on 7 September. Commenting on the latest price action of Bitcoin and El Salvador’s BTC adoption, Simon Peters, Market Analyst at eToro, said: “On the day bitcoin became legal tender in the Central American nation of El Salvador, the price of bitcoin plummeted by over $7,000 in seconds. The day saw a spike of liquidations as the token was adopted as an official currency of the country, with Salvadorians now allowed to transact for everyday items in the crypto asset.”