Today is a historic day. As you all know my preference is for BCH and I strongly believe that BTC is a less than optimal choice for a currency, but that doesn't make this bad news. Today the law has passed in El Salvador that will officially recognize BTC as legal tender throughout the country.
This is great news for cryptocurrency in general as it is a massive step towards global adoption. It's not limited to El Salvador either as this makes Bitcoin a foreign currency regardless of where you live in the world which mean lawmakers will be scrambling for how to react to it. While some may choose to try to lock it down, other will accept the fact that Bitcoin is now a currency, not an asset, complete with all relevant tax laws (which should mean, much less tax).
How it will work in the country is not yet known, but the assumption is that prices will continue to be expressed in USD with the price being translated to BTC immediately prior to payment. The Lightning Network twill then be used to facilitate the payment to reduce fees to near zero (which BCH does on-chain, because BCH is baller).
Below is a translation of the full law. Article 7 is particularly interesting as it mandates that merchants must accept Bitcoin if they can under the rules of Article 12. Entry requirements are low as all you need is a computer or smartphone, so possession of either of those means you must accept bitcoin as payment.
GENERAL DISPOSITIONS
Article 1: 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.
What is mentioned in the previous paragraph does not hinder the application of the Monetary Integration law.
Article 2: The exchange rate between bitcoin and the United States dollar, subsequently USD, will be freely established by the market.
Article 3: Prices may be expressed in bitcoin.
Article 4: Tax contributions can be paid in bitcoin.
Article 5: Exchanges in bitcoin will not be subject to capital gains tax, just like any legal tender.
Article 6: For accounting purposes, the USD will be used as the reference currency.
Article 7: Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service.
Article 8: Without prejudice to the actions of the private sector, the State shall provide alternatives that allow the user to carry out transactions in bitcoin and have automatic and instant convertibility from bitcoin to USD if they wish. Furthermore, the State will promote the necessary training and mechanisms so that the population can access bitcoin transactions.
Article 9: The limitations and operations of the alternatives of automatic and instantaneous conversion from bitcoin to USD provided by the State will be specified in the Regulations issued for this purpose.
Article 10: The Executive Branch will create the necessary institutional structure to apply this law. FINAL AND TRANSITIONAL PROVISIONS
Article 11: The Central Reserve Bank and the Superintendency of the Financial System shall issue the corresponding regulations within the period mentioned in Article 16 of this law.
Article 12: Those who, by evident and notorious fact, do not have access to the technologies that allow them to carry out transactions in bitcoin are excluded from the obligation expressed in Article 7 of this law. The State will promote the necessary training and mechanisms so that the population can access bitcoin transactions.
Article 13: All obligations in money expressed in USD, existing before the effective date of this law, may be paid in bitcoin.
Article 14: Before the entry into force of this law, the State will guarantee, through the creation of a trust at the Banco de Desarrollo de El Salvador (BANDESAL), the automatic and instantaneous convertibility of bitcoin to USD necessary for the alternatives provided by the State mentioned in Article 8.
Article 15: This law will have a special character in its application concerning other laws that regulate the matter, repealing any provision that contradicts it.
Article 16: This decree will take affect ninety days after its publication in the Official Gazette.
As you can see from the above the law officially comes into effect 90 days from publication, so we won't necessarily see massive changes until September, but it will definitely be one to keep an eye on.
The hope is that adoption on this scale will create a snowball effect where other cryptocurrencies start to be adopted in nations around the world, and as we all know when the crypto snowball starts rolling and continues to grow, it will be unstoppable.
Let's all of us, BTC supporters, BCH support and supporters of weird coins all put aside our differences and celebrate this day for what it is. This is the day that cryptocurrencies officially began to challenge fiat currencies and the corrupt, broken systems that support them. Victory is within our grasp!
I don't support that law as written because it leaves many questions open and it doesn't make a clear definition of what Bitcoin is, nor it classifies all the types of transactions that exist within the Bitcoin ecosystem without a definition anything can be called Bitcoin. We will have to wait 90 days for the law to be implemented. And in 1 to 2 years we will see the results of the same law as well.
He can make a law but it will be the people who will decide to obey it or not, and if Salvadorians find it too difficult to use it or too problematic because of the ups and downs of the currency they could end up just not accepting it even if it is legal tender.
If enough Salvadorians don't find it attractive they will just disobey the law and soon enough it could be revoked. Time is what will tell us what is going to happen with Bitcoin and the law in El Salvador. I hope it actually helps people at the end of the day to become more financially independent.