Last updated on December 1st, 2021 at 06:50 pm
Barely a week after El Salvador formally adopted Bitcoin as a legal tender, the Central American country is granting foreign investors a tax waiver on gains from the digital currency.
This is according to Agence France-Presse (AFP).
Javier Argueta, legal advisor to President Nayib Bukele, who reportedly spoke to the publication said: “If a person has assets in Bitcoin and makes high profits, there will be no tax. This is done obviously to encourage foreign investment,” adding that “There will be no taxes to pay on either the capital increase or the income.”
Trailed by criticism…
Bitcoin enthusiasts had hailed El Salvador for breaking the record of becoming the first country to formally adopt the digital coin. However, the government faced backlash.
There were so many hurdles as Salvadorans struggled to convert the free Bitcoin (worth $30) the government gave them to fiat money. The cash dispenser failed. Financial Times reports an official confirmed only three people withdrew cash from the machine in a whole day.
Many Salvadorans also took to the streets to protest against the government’s Bitcoin project. Residents alleged they were intimidated by security operatives who also infringed on their fundamental rights.
The World Bank showed zero support for the project citing environmental and transparency issues. Hence the organization declined to help El Salvador roll out its Bitcoin adoption plan.
The International Monetary Fund also criticized Bukele’s government’s decision to adopt Bitcoin as a legal tender. Besides citing economic, financial, and legal concerns, the international body also noted that crypto-based assets are associated with substantial risks.
The El Salvadoran Legislature had in June voted to legalize the Bitcoin project. The project was adopted after 62 of the 84 lawmakers voted in its favor.
Mr. Bukele had pushed for the adoption of Bitcoin as a legal tender citing a gap in financial inclusivity. It is said that financial services are not available to over 70% of the 6.5 million people resident in the country.
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