El Salvador, the first country to establish Bitcoin as a legal tender, has taken another step towards technological innovation. On April 1, President Nayib Bukele sent a bill to Congress to eliminate all income, property, and capital gains taxes on technology innovations.
This move parallels the establishment of the National Bitcoin Office (ONBTC), which aims to position the country as a technological and economic power.
Bitcoin’s legalization and investments in El Salvador
Bukele legalized Bitcoin on September 7, 2021, viewing it as a means to counter hyperinflation and dependence on the U.S. dollar. Since then, El Salvador has re-strategized Bitcoin investments and utilized capital gains to rebuild the nation. Bukele believes in winding down tax requirements to expedite technological development and improve the economy.
ONBTC’s role in El Salvador’s technological progress
The establishment of ONBTC supports this initiative by creating a regulatory body to conduct joint initiatives with Bitcoin entrepreneurs and companies. Asociación Bitcoin de El Salvador, the Bitcoin Association of El Salvador, endorses ONBTC’s goal of positioning the country as a technological and economic power.
Along with promoting tourism, countering terrorism, and building regional business hubs, El Salvador is now attempting an economic comeback. In January 2023, it passed legislation that provides the legal framework for Bitcoin-backed bonds, Volcano Bonds. The terminology of Volcano Bonds is derived from Bitcoin City’s location, which is set to become a renewable crypto-mining hub powered by hydrothermal energy from the nearby Conchagua volcano.
El Salvador’s new move towards technological innovation by eliminating taxes on technology innovations and establishing ONBTC is expected to contribute to the nation’s growth and development.