El Salvador made history in September 2021 by becoming the first country to establish Bitcoin as a legal tender. The move was aimed at countering hyperinflation and dependence on the US dollar, which has long been a significant concern for the country. Since then, El Salvador has been restrategizing its Bitcoin investments and utilizing capital gains to rebuild the nation.
As part of its ongoing efforts to expedite technological development and attract international investment, President Nayib Bukele recently eliminated all income, property, and capital gains taxes on technology innovations. The move was intended to encourage local entrepreneurs and foreign investors to set up shop in El Salvador, positioning the country as a technological and economic power. The bill was officially sent to Congress on April 1, as promised.
To support this initiative, Bukele also established the National Bitcoin Office (ONBTC), which will work with Bitcoin entrepreneurs and companies to conduct joint initiatives. The Bitcoin Association of El Salvador has welcomed the move, stating that it aligns with its vision to make the country a hub for technological innovation and entrepreneurship.
In addition to promoting technological development, Bukele is also taking measures to reinvent El Salvador in other ways. One such measure is promoting tourism to boost the country’s economy. Bukele has been working with private companies to build beach resorts and theme parks to attract international visitors.
Another measure is countering terrorism. El Salvador has a long history of gang violence and crime, which has impacted the country’s economy and security. Bukele has been working to tackle this issue, and his administration has implemented several measures to address it, including deploying the military to high-crime areas.
Finally, Bukele is also focused on building regional business hubs to attract foreign investment. As part of this effort, El Salvador recently passed legislation to provide the legal framework for Bitcoin-backed bonds called Volcano Bonds. These bonds are named after the location of Bitcoin City, which is set to become a renewable crypto-mining hub powered by hydrothermal energy from the nearby Conchagua volcano.
El Salvador’s decision to eliminate taxes on technology innovations is a significant step towards its goal of becoming a technological and economic power. Along with the establishment of the National Bitcoin Office and the promotion of tourism and regional business hubs, El Salvador is positioning itself as an attractive destination for entrepreneurs and investors. These efforts are expected to have a positive impact on the country’s economy and overall development.