The new bitcoin bill proposed in the Legislature this Tuesday night establishes that every business in El Salvador must accept bitcoin as a form of payment when a consumer demands any good or service.

Art. 7. “Every economic agent must accept Bitcoin as a kind of fee when the recipient of a good or service offers it to him”, Article 7 states.

Businesses are excluded only when they do not have access to technologies that allow the transaction of Bitcoin “in a bad and transparent way”, for which, the same article of the law indicates that it promotes training and methods. People can make these transactions.

In addition, all obligations expressed in dollars, including government debt, such as debt and the payment of pensions, are previously acquired obligations and can be paid with bitcoin, according to Article 13.

Art. 13. All obligations of money expressed in dollars prior to the effective date of this Act may be paid in Bitcoin.

Under its terms, the acceptance of this currency will allow all tax contributions (e.g., taxes such as VAT and income) to be paid in bitcoins.

Representatives of the ruling party today plan to recognize Bitcoin as a legal tender, find out what is in the bill

Art. 4 All tax contributions can be paid in bitcoins

However, transactions made with this virtual currency are not subject to any tax, as many economists have already warned.

Art. 5 Transactions in Bitcoin are not subject to capital gains tax as with any legal tender.

In its articles, it also demonstrates that this law has a special character, so that any other law contrary to it will be repealed.

Art. 15 This Act shall have a special character in conjunction with other laws governing the matter in its application and any provision thereof shall be repealed.

I have sent its initial draft #LeyBitcoin To -Sepal. pic.twitter.com/9vFztvvryG

– நயீப் புக்கலே a (aynayibbukele) June 9, 2021

Risky investment

In El Salvador, local economists also fear that this “boost” by Buccaneer was made without technical advice on the implications it would create, not only because it would create uncertainty, but also because it would create problems for the treasury and lack of regulation, which could pave the way for fraud.

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Oscar Cabrera, an economist and former chairman of the Federal Reserve, said: “The desire to accept bitcoin as a legal tender creates uncertainty because it is not clear whether it will be supported by the El Salvador Central Bank, and when the country negotiates a plan with the International Monetary Fund. In addition, more than a hundred of these cryptocurrencies have many risks and many fraudulent properties. They are so volatile and dangerous that no financial regulator or lawyer knows about this type of cryptocurrency. ” Confident.

For his part, economist Luis Membrano said it was too risky because it did not maintain its value over time and there was no financial regulation.