Crypto User's DREAM?... Legal Tender in El Salvador? Do we care?
Note: I've often found crypto news stories to be unclear in terms of what it means for a crypto user. The purpose of this section of the blog is to do just that - translate what key news stories actually mean from the standpoint of a "user" of crypto.
The story
If you're in the crypto world, there is alot of noise about El Salvador making bitcoin Legal Tender pushed by the El Salvadoran President and backed by a super majority in their congress.
The actual law posted by the president of El Salvador can be found here
The story as reported by CoinDesk is found here
There was also a 20,000+ person impromptu twitter spaces event yesterday including big names like Jack Dorsey, the president of El Salvador Nayib Bukele, Nic Carter, Anthony Pompliano and other big names in the crypto world. See below
Here is The TLDR is
It's 3 pages we can actually read it! Novel innit?
Taxes can be paid in bitcoin
No capital gains taxes for bitcoin ("just like any other legal tender")
The government will offer a way or ways to automatically and instantly convert Bitcoin to USD
Businesses MUST accept bitcoin payments. Yes that's a Must...
It is NOT the only legal tender. The US Dollar is also legal tender
As a crypto user...so what?
It's exciting! While there are many many other use cases for crypto, one of the most powerful ones is being able to use it just like we use dollars, or pounds (or your local currency).
...as a user NOT in El Salvador
It's exciting to be able to watch how truly usable crypto will be now that it has the seat of power. This may be roadmap for what adding crypto as legal tender in other countries may look like
We can fantasize about NO CAPITAL GAINS Taxes on crypto. (This is a big deal if you trade crypto...), or about receiving your salary in crypto and choosing how much to convert to dollars.
...if i were a user in El Salvador
The government has promised automatic and instantaneous conversion to US Dollars.
So I technically don't need to worry about price fluctuations.
But I also have the option of taking on that risk. I will have the opportunity to have currency that CAN appreciate vs a deflationary currency. I could choose to take on the risk of fluctuation with "some" of my money, and historically the level of bitcoin appreciation has been LIFE CHANGING for many and definitely worth the risk with a portion of income.
All the claims of faster, easier, cheaper to transact will be put to the test
You may actually be able to go FULLY crypto: Get your Salary in bitcoin, Spend in bitcoin, Save in bitcoin, Invest in bitcoin... :) (of course some diversification would be wise)
It's exciting! We get a chance to see the promise of crypto for the "currency/legal tender" use case in action; we can evaluate it and make it even better.
Happy Wednesday, ....off to my day job....