The price of the world’s most popular cryptocurrency had slumped to $31,017 at 4.15pm on Tuesday. But Bitcoin’s price has since soared by 10.6 percent to $34,312. During the same period, Ethereum jumped 9.6 percent from $2,310 to $2,533. Meme coin Dogecoin soared by 11.1 percent from $0.297 to $0.329.
Ministers in El Salvador’s Congress voted by a “supermajority” in favour of the Bitcoin Law, which received 62 out of 84 possible votes.
Prices in the Central American country can now be shown in Bitcoin, while tax contributions can be paid with the digital currency.
Exchanges in the cryptocurrency will also not be subject to capital gains tax.
However, it is still not clear how exactly El Salvador will roll out Bitcoin as legal tender in the country.
The proposal still needs to go through El Salvador’s legislative process before being passed as law.
The law passed in the country by ministers reads: “The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out.”
El Salvador’s current official currency is the US dollar, and the proposed law states the exchange rate with the currency “will be freely established by the market”.
The law adds the state will “promote the necessary training and mechanisms so that the population can access bitcoin transactions”.
El Salvador President Nayib Bukele had earlier sent the law to the country’s to begin the voting process.
This came days after he announced the Central American nation had agreed a partnership with digital wallet company Strike to build El Salvador’s modern financial infrastructure using Bitcoin technology.
Bitcoin’s price has slashed in half after surging to a record high in mid-April, and had yet to show any signs of a sustained recovery.
Earlier this week, the price of the cryptocurrency plummeted yet again after Donald Trump said he viewed it as a “scam” affecting the value of the US dollar.
The former US President told Fox Business: “Bitcoin, it just seems like a scam.
“I don’t like it because it’s another currency competing against the dollar.”
Mr Trump added he wanted the dollar to be the “currency of the world”.
Mr Trump has previously spoken out against Bitcoin, which has a tendency to fluctuate wildly when leading figures comment on it.
In 2019, the cryptocurrency plunged by around $20,000 after he said he was “not a fan” of it and rival digital currencies.
In a post on Twitter, from which he has now been banned, the former US President claimed crypto assets could “facilitate unlawful behavior, including drug trade and other illegal activity”.
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