11 ms·

El Salvador Congress Approves Bitcoin As Legal Currency

43 points by cdolan 5y ago

cdolan 5y ago
Tweet Translation using Google Translate: “#EnPlenaria| With 62 votes in favor (by show of hands) the opinion and bill of law that recognizes the #bitcoin as currency of legal use. @AsambleaSV #LeyBitcoin “ Draft copy of the legislation: https://mobile.twitter.com/nayibbukele/status/1402446890466217985 https://mobile.twitter.com/nayibbukele/status/14024468904662... The president of El Salvador, @nayibbukele, participated in a Twitter Spaces conversation around 1-2 AM US eastern time. Some quotes available here: https://mobile.twitter.com/APompliano/status/1402493588806717449 https://mobile.twitter.com/APompliano/status/140249358880671...
solveit 5y ago
What does this mean? Will the government accept BTC for, say, taxes? Will businesses have to/be encouraged to accept BTC?
- el-salvador 5y ago
  Yup, exactly that. We also use the US Dollar as main currency since 2001.
  - mandelbrotwurst 5y ago
    If debts are denominated in dollars, do you know how it will be determined how many Bitcoin would suffice for repayment (and vice versa)?
    - TimJRobinson 5y ago
      They're going to have a reserve fund of BTC / USD to make exchanging easy, and I'd assume that will have a rate that most merchants use.
      - londons_explore 5y ago
        Will $150million USD be a big enough reserve? Assuming anyone can exchange against that, I can imagine that being wiped out in just a few hours of a bitcoin whale deciding they want to cash out...
        nly 5y ago
        They can control the spread on exchanging against their reserve
    - el-salvador 5y ago
      We have not received much information, but from what I understand, the accounting currency would continue to be the USD.
TimJRobinson 5y ago
Was just listening to the Twitter call with the President. To clarify questions from the last thread (https://news.ycombinator.com/item?id=27408683 https://news.ycombinator.com/item?id=27408683): - https://twitter.com/nayibbukele/status/1402442597235310596 https://twitter.com/nayibbukele/status/1402442597235310596 Is the full text of the bill in Spanish and English - You can pay your taxes in Bitcoin. - All merchants must accept Bitcoin. Merchants can instantly convert to USD at time of payment if they wish. - Citizens can use any software they like to transfer Bitcoin, they are not required to use the Strike app. - They are creating a $150M USD / BTC Reserve fund to allow citizens to easily convert between the two currencies.
- el-salvador 5y ago
  Salvadoran here... I'm kind of losing track of all the changes that have been happening recently here recently. When most of the country wakes in about five hours, they will wake up with a new law that adds a new legal tender in 90 days. The most detailed explanation of the plan, has been in a foreign language - English -, in a twitter space this midnight and a Bitcoin conference in Miami last Saturday.
  - TimJRobinson 5y ago
    Haha, meanwhile we're all jealous that your country can go from proposal to passed bill in 3 days. Imagine how much the USA could accomplish if congress worked that fast..
    - deleted 5y ago
      [deleted]
    - deleted 5y ago
      [deleted]
    - deleted 5y ago
      [deleted]
    - sennight 5y ago
      Yes, what we need more than anything else is more laws - generated at a rapid rate.
FreeTrade 5y ago
Sigh. Bitcoin BTC, at 3 transactions per second, doesn't have the capacity to support El Salvador's economy. Even if Lightning worked (it doesn't), BTC doesn't have enough capacity to open channels for users at a reasonable cost. Salvadorians will end up forced to use proprietary payment networks denominated in BTC. BTC is not cash anymore, it won't work as such. There are other cryptos that could work, we'll have to see how broadly 'bitcoin' is interpreted. The CGT exemption will be of interest to crypto whales and entrepreneurs and may attract some, but organized crime is a concern given the nature of the asset.
- adriancr 5y ago
  It's a good experiment: - we'll see how good of a currency it is - how creative people are when trying to avoid delays / transaction costs. - how law enforcement will work when money is stolen. (imagine their government's funds getting stolen, ordinary people I doubt they will do much) I assume they will likely make their own exchange where people can park funds and 'transfer' funds on paper. This also solves returning money back and so on.
  - standyro 5y ago
    Lol doesn’t this defeat the whole point of a decentralized currency? You basically just described a modern bank
    - adriancr 5y ago
      That is unfortunately correct, I'm curious what other solutions to usual problems bitcoin can provide, as it stands now the volatility/transaction costs/speed/immutability of transactions are going to be felt badly.
    - gruez 5y ago
      >You basically just described a modern bank In what way? The "make their own exchange where people can park funds and 'transfer' funds on paper" bit? The lightning network allows this to be done without trusting your exchange with your funds since transfers are nearly free and instant.
knilkantha 5y ago
The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes! https://twitter.com/nayibbukele/status/1402507224916836352 https://twitter.com/nayibbukele/status/1402507224916836352
yumraj 5y ago
Looks like El Salvador is trying to become a haven for money laundering. Wonder if some economist can chime in. If there is a sudden influx of laundered capital in El Salvador, won't that lead to massive inflation in the local currency and basically kill the economy? Or, do I have it backwards?
- el-salvador 5y ago
  Local currency is only a collectible item. USD has been used since 2001.
  - yumraj 5y ago
    Oh, that makes it even more interesting.. Basically El Salvador becomes the new Switzerland due to laundered and hidden money? I'm unable to wrap my head around due to the USD angle.
    - el-salvador 5y ago
      From what I understand the government wants to promote the country to bitcoin investors and companies by offering no capital gains taxes on Bitcoin. They also promoted that El Salvador doesn't have property taxes. I wouldn't call El Salvador a laundering capital though. Our local regulations are super strict. Most payments above USD 100 require and ID. It is impossible to pay or deposit, even one cent, in a bank without and ID or passport. Other countries are much more lax.
      - yumraj 5y ago
        > I wouldn't call El Salvador a laundering capital though.. My apologies, I meant no disrespect to El Salvador. Also, I did not mean that it is currently the laundering capital. I was merely asking the question that would it become possible for someone to just enter the country with BTC and exchange into USD, and if so that would lead to laundering. But I’m no expert in this topic so I’m pretty sure there will be safeguards..
zaptheimpaler 5y ago
This could be a catastrophe. Since BTC is still too unstable to use as an everyday currency, citizens will likely use BTC only as a payment rail and convert to USD. The government will end up net long BTC. Any BTC whale in the world could dump BTC and destroy an entire countries economy. They are trading being beholden to the US for being beholden to anonymous BTC whales. Some fucking VCs just took over an entire country. My heart goes out to Salvadorans, i really hope im wrong and this works out well.
- chris123 5y ago
  Pioneers are often mocked like this, I salute El Salvador ♥
  - zaptheimpaler 5y ago
    I don't mean to mock anyone, this scares the hell out of me. I just want to call out what I see here in the hope that some of you might reconsider the implications of what is happening. Everything branded as "new and shiny" or pioneering technology is not automatically better.
- krageon 5y ago
  > Any BTC whale in the world could dump BTC and destroy an entire countries economy This is true for every single currency ever and so doesn't make sense to invoke strictly for this one. Even your original claim (that it can't be used as an everyday currency) is already demonstrably untrue as there are plenty of goods that can be bought using purely bitcoin.
  - zaptheimpaler 5y ago
    > This is true for every single currency ever and so doesn't make sense to invoke strictly for this one It does, actually because the large holders of fiat currencies are governments. Their holdings are public. El Salvador can atleast identify, talk to and negotiate with them. They are at least somewhat transparent and accountable to their own citizens. The large holders of BTC are completely unknown. You morons are empowering a global mafia. We don't know who they are, they have zero accountability to anyone but themselves. Please wake the fuck up, this is not about number go up, you are fucking with global politics without even knowing it, happily complicit because it makes you money. In a decade, holding crypto will be a black stain on your soul like holding shares in the East India Company or giving money to dictators.

43 points by cdolan 5y ago

Tweet Translation using Google Translate: “#EnPlenaria| With 62 votes in favor (by show of hands) the opinion and bill of law that recognizes the #bitcoin as currency of legal use. @AsambleaSV #LeyBitcoin “ Draft copy of the legislation: https://mobile.twitter.com/nayibbukele/status/1402446890466217985 https://mobile.twitter.com/nayibbukele/status/14024468904662... The president of El Salvador, @nayibbukele, participated in a Twitter Spaces conversation around 1-2 AM US eastern time. Some quotes available here: https://mobile.twitter.com/APompliano/status/1402493588806717449 https://mobile.twitter.com/APompliano/status/140249358880671...

solveit 5y ago

What does this mean? Will the government accept BTC for, say, taxes? Will businesses have to/be encouraged to accept BTC?

el-salvador 5y ago
Yup, exactly that. We also use the US Dollar as main currency since 2001.
- mandelbrotwurst 5y ago
  If debts are denominated in dollars, do you know how it will be determined how many Bitcoin would suffice for repayment (and vice versa)?
  - TimJRobinson 5y ago
    They're going to have a reserve fund of BTC / USD to make exchanging easy, and I'd assume that will have a rate that most merchants use.
    - londons_explore 5y ago
      Will $150million USD be a big enough reserve? Assuming anyone can exchange against that, I can imagine that being wiped out in just a few hours of a bitcoin whale deciding they want to cash out...
      - nly 5y ago
        They can control the spread on exchanging against their reserve
  - el-salvador 5y ago
    We have not received much information, but from what I understand, the accounting currency would continue to be the USD.

TimJRobinson 5y ago

Was just listening to the Twitter call with the President. To clarify questions from the last thread (https://news.ycombinator.com/item?id=27408683 https://news.ycombinator.com/item?id=27408683): - https://twitter.com/nayibbukele/status/1402442597235310596 https://twitter.com/nayibbukele/status/1402442597235310596 Is the full text of the bill in Spanish and English - You can pay your taxes in Bitcoin. - All merchants must accept Bitcoin. Merchants can instantly convert to USD at time of payment if they wish. - Citizens can use any software they like to transfer Bitcoin, they are not required to use the Strike app. - They are creating a $150M USD / BTC Reserve fund to allow citizens to easily convert between the two currencies.

el-salvador 5y ago
Salvadoran here... I'm kind of losing track of all the changes that have been happening recently here recently. When most of the country wakes in about five hours, they will wake up with a new law that adds a new legal tender in 90 days. The most detailed explanation of the plan, has been in a foreign language - English -, in a twitter space this midnight and a Bitcoin conference in Miami last Saturday.
- TimJRobinson 5y ago
  Haha, meanwhile we're all jealous that your country can go from proposal to passed bill in 3 days. Imagine how much the USA could accomplish if congress worked that fast..
  - deleted 5y ago
    [deleted]
  - deleted 5y ago
    [deleted]
  - deleted 5y ago
    [deleted]
  - sennight 5y ago
    Yes, what we need more than anything else is more laws - generated at a rapid rate.

FreeTrade 5y ago

Sigh. Bitcoin BTC, at 3 transactions per second, doesn't have the capacity to support El Salvador's economy. Even if Lightning worked (it doesn't), BTC doesn't have enough capacity to open channels for users at a reasonable cost. Salvadorians will end up forced to use proprietary payment networks denominated in BTC. BTC is not cash anymore, it won't work as such. There are other cryptos that could work, we'll have to see how broadly 'bitcoin' is interpreted. The CGT exemption will be of interest to crypto whales and entrepreneurs and may attract some, but organized crime is a concern given the nature of the asset.

adriancr 5y ago
It's a good experiment: - we'll see how good of a currency it is - how creative people are when trying to avoid delays / transaction costs. - how law enforcement will work when money is stolen. (imagine their government's funds getting stolen, ordinary people I doubt they will do much) I assume they will likely make their own exchange where people can park funds and 'transfer' funds on paper. This also solves returning money back and so on.
- standyro 5y ago
  Lol doesn’t this defeat the whole point of a decentralized currency? You basically just described a modern bank
  - adriancr 5y ago
    That is unfortunately correct, I'm curious what other solutions to usual problems bitcoin can provide, as it stands now the volatility/transaction costs/speed/immutability of transactions are going to be felt badly.
  - gruez 5y ago
    >You basically just described a modern bank In what way? The "make their own exchange where people can park funds and 'transfer' funds on paper" bit? The lightning network allows this to be done without trusting your exchange with your funds since transfers are nearly free and instant.

knilkantha 5y ago

The #BitcoinLaw has been approved by a supermajority in the Salvadoran Congress. 62 out of 84 votes! https://twitter.com/nayibbukele/status/1402507224916836352 https://twitter.com/nayibbukele/status/1402507224916836352

yumraj 5y ago

Looks like El Salvador is trying to become a haven for money laundering. Wonder if some economist can chime in. If there is a sudden influx of laundered capital in El Salvador, won't that lead to massive inflation in the local currency and basically kill the economy? Or, do I have it backwards?

el-salvador 5y ago
Local currency is only a collectible item. USD has been used since 2001.
- yumraj 5y ago
  Oh, that makes it even more interesting.. Basically El Salvador becomes the new Switzerland due to laundered and hidden money? I'm unable to wrap my head around due to the USD angle.
  - el-salvador 5y ago
    From what I understand the government wants to promote the country to bitcoin investors and companies by offering no capital gains taxes on Bitcoin. They also promoted that El Salvador doesn't have property taxes. I wouldn't call El Salvador a laundering capital though. Our local regulations are super strict. Most payments above USD 100 require and ID. It is impossible to pay or deposit, even one cent, in a bank without and ID or passport. Other countries are much more lax.
    - yumraj 5y ago
      > I wouldn't call El Salvador a laundering capital though.. My apologies, I meant no disrespect to El Salvador. Also, I did not mean that it is currently the laundering capital. I was merely asking the question that would it become possible for someone to just enter the country with BTC and exchange into USD, and if so that would lead to laundering. But I’m no expert in this topic so I’m pretty sure there will be safeguards..

zaptheimpaler 5y ago

This could be a catastrophe. Since BTC is still too unstable to use as an everyday currency, citizens will likely use BTC only as a payment rail and convert to USD. The government will end up net long BTC. Any BTC whale in the world could dump BTC and destroy an entire countries economy. They are trading being beholden to the US for being beholden to anonymous BTC whales. Some fucking VCs just took over an entire country. My heart goes out to Salvadorans, i really hope im wrong and this works out well.

chris123 5y ago
Pioneers are often mocked like this, I salute El Salvador ♥
- zaptheimpaler 5y ago
  I don't mean to mock anyone, this scares the hell out of me. I just want to call out what I see here in the hope that some of you might reconsider the implications of what is happening. Everything branded as "new and shiny" or pioneering technology is not automatically better.
krageon 5y ago
> Any BTC whale in the world could dump BTC and destroy an entire countries economy This is true for every single currency ever and so doesn't make sense to invoke strictly for this one. Even your original claim (that it can't be used as an everyday currency) is already demonstrably untrue as there are plenty of goods that can be bought using purely bitcoin.
- zaptheimpaler 5y ago
  > This is true for every single currency ever and so doesn't make sense to invoke strictly for this one It does, actually because the large holders of fiat currencies are governments. Their holdings are public. El Salvador can atleast identify, talk to and negotiate with them. They are at least somewhat transparent and accountable to their own citizens. The large holders of BTC are completely unknown. You morons are empowering a global mafia. We don't know who they are, they have zero accountability to anyone but themselves. Please wake the fuck up, this is not about number go up, you are fucking with global politics without even knowing it, happily complicit because it makes you money. In a decade, holding crypto will be a black stain on your soul like holding shares in the East India Company or giving money to dictators.