On June 8 of this year, the Legislative Assembly of El Salvador approved the Bitcoin Law, with the objective of generating employment opportunities for the population and foreign investment, promoting financial inclusion and promoting economic dynamism.
Said legislation includes the following articles as general provisions:
Art.1. The law has as its object the regulation of bitcoin as legal tender, unrestricted with liberatory power, unlimited in any transaction and in any title that people require to carry out.
Art.2. The exchange rate between Bitcoin and the United States dollar will be set freely by the market.
Art.3. All prices may be expressed in bitcoin.
Art.4. Tax contributions may be paid in bitcoin.
Art.5. Trades in bitcoin will not be subject to capital gains tax like any legal tender.
Art.6. For accounting purposes, the Dollar will be used as the reference currency.
Art.7. Every economic agent must accept bitcoin as a form of payment when it is offered to him by the person who acquires a good or service.
Art.8. Without prejudice to the actions of the private sector, the State will promote alternatives that allow the user to carry out bitcoin transactions, as well as have automatic and instantaneous convertibility of bitcoin to dollars if desired.
Art.9 The limitations and operation of the automatic and instantaneous conversion alternatives from bitcoin to dollar provided by the State will be specified in the Regulation issued for that purpose.
Art.10. The Executive Branch will create the necessary institutional structure for the purposes of applying this law.
It will enter into force 90 days after its publication in the Official Gazette.