The Bitcoin Law of El Salvador

On June 8, 2021, the Parliament of the Republic of El Salvador passed the Bitcoin Law consisting of the following 16 articles. The law came into effect on September 7, 2021.

”Ley Bitcoin” — The Bitcoin Law of El Salvador #

1. The purpose of this law is to establish Bitcoin as legal tender, unrestricted and unlimited for all types of commercial transactions by natural and legal persons, public and private.
2. The exchange rate between Bitcoin and the US dollar shall be freely determined by the market.
3. All prices may be expressed in Bitcoin.
4. Taxes may be paid in Bitcoin.
5. Exchange rate gains from the conversion of Bitcoin shall be tax-exempt, as is the case with other foreign currencies.
6. For accounting purposes, the US dollar shall be used as the reference currency.
7. Every economic agent must accept Bitcoin as payment when a customer wishes to pay for a good or service with Bitcoin.
8. In addition to private-sector offerings, the state shall create alternatives that allow people to make Bitcoin payments and, upon request, enable automatic and instant conversion of Bitcoin into US dollars.
9. The terms and operation of the state-provided alternatives for automatic and instant conversion of Bitcoin to dollars shall be set out in regulations issued for this purpose.
10. The authorities shall create the institutional framework necessary for the application of this law.
11. The Central Bank and the financial regulatory authority shall issue the corresponding regulations within the timeframe specified in Article 16 of this law.
12. Persons who demonstrably and evidently lack access to the technologies required to accept Bitcoin are exempt from the obligation under Article 7 of this law. The state shall promote the necessary education and measures to enable the population to use Bitcoin.
13. All monetary obligations denominated in US dollars that existed before this law came into effect may be paid in Bitcoin.
14. Before this law comes into effect, the state shall establish a trust at the Development Bank of El Salvador (BANDESAL) to guarantee the automatic and instant conversion of Bitcoin to US dollars for the state-provided alternatives pursuant to Article 8.
15. Should existing laws conflict with this special law, the conflicting provisions are hereby repealed.
16. This law shall come into effect ninety days after its publication.

Sources:

• Ley Bitcoin — Original in Spanish
• Ley Bitcoin — English translation