News from Central America: El Salvador’s parliament passed a law on the use of bitcoin as a means of payment.
In 90 days, the necessary infrastructure will be created in the state. After El Salvador’s President Nayyib Bukele signs the law, it goes into effect immediately and bitcoin becomes legal tender, along with the US dollar. Payments in BTC will be accepted after the necessary infrastructure is created. For this, a period of 90 days is set.
El Salvador does not have its own national currency; the US dollar is used for payments. In fact, bitcoin is now becoming the state currency of El Salvador de-facto. To maintain the stability of bitcoin circulation, a bitcoin guarantee fund is being formed in the amount of $150 million (over 4 thousand BTC).
Experts note that this information has both positive and negative impacts on the cryptocurrency market. It is positive that a new level of adaptation of cryptocurrencies has been achieved, and at the state level. But there is also a negative impact: now bitcoin in the United States, for example, can be recognized as a foreign currency, and income received from trading or investing in BTC will be taxed as usual in such cases.
Capital Gains Tax for assets held for less than a year is calculated in the United States on a progressive scale of 0%, 15%, and 20%, depending on the amount of income. The tax for assets held for more than a year is calculated at a maximum rate of 20%.
Until now, a reduced rate has been applied to cryptocurrencies in the United States in accordance with the Internal Revenue Service (IRS) decision of 2014. The IRS ruled that cryptocurrencies are property, and there is no federal property tax at all, there are only local taxes at the state level.
The influence of the United States on the cryptocurrency market is very important. According to the analytical company Chainalysis, in 2020 US investors earned $4.1 billion only on bitcoin, almost 4 times more than Chinese investors ($1.1 billion). The Japanese and the British received 900 million and 800 million in profits, respectively; Russians, Germans, and French – 600 million each.
It is the events in America that have the greatest impact on the cryptocurrency market, and not at all information from the Middle Kingdom. The market has been relatively little affected by the negative information that the Chinese authorities prohibit mining, and Chinese search engines block cryptocurrency exchanges. But any news from the United States, including Elon Musk’s tweets, has a much stronger influence.
Now the growth of bitcoin is also supported by information from the American IT company MicroStrategy. This is the largest BTC hodler, MicroStrategy owns 92 thousand BTC, at today’s exchange rate it is almost $3.4 billion. The company announced that it will raise another half a billion dollars to buy bitcoin in the form of a loan with maturity in 2028.