El Salvador is attempting to entice international investment by enacting significant tax advantages for Bitcoin trading.
According to Agence France-Presse, Javier Argueta, a legal adviser to President Nayib Bukele, promotes international investment through significant tax reductions on Bitcoin.
According to Argueta, there will be no tax if a person possesses Bitcoin assets and generates a large income. This is done to promote foreign investment. Therefore, El Salvador will not levy any taxes on either capital growth or income increase.
To counteract the possibly illegal usage of Bitcoin, Argueta allegedly stated that the Salvadoran government would be aggressively tracing transactions on El Salvador’s official BTC wallet, Chivo. In addition, he stated, “We are implementing a series of recommendations from international institutions against money laundering.”
To reduce the impact of severe volatility or price changes, the Chivo wallet would temporarily suspend Bitcoin transactions on the app if the value of Bitcoin fell.
El Salvador became the first country in the world to recognize Bitcoin as legal money on Tuesday, mandating all local businesses to accept Bitcoin as a form of payment. In addition, El Salvador established the official BTC wallet known as Chivo in collaboration with worldwide firms such as Bitso crypto exchange and Silvergate Bank, allowing users to convert BTC transactions into US dollars or withdraw using a special ATM with no transaction fees.
On the introduction day, the Chivo wallet was momentarily pulled down for maintenance, as previously announced. However, according to many social media reports, some Chivo wallet users still have severe problems transacting or withdrawing funds from the crypto wallet after El Salvador repaired it last week.