By George Ward
After being the first nation worldwide to make BTC a legal tender two years ago, El Salvador seeks to boost technology innovation by waiving taxes. Nayib Bukele, El Salvador’s president, said he intends to present a bill to El Salvador’s Congress in the coming week.
The bill aims to end all taxes on coding, artificial intelligence development, software programming, communications hardware production, apps, and computing. Bukele’s objective is to turn El Salvador into a crypto hub, and this move is meant to increase the attraction of tech start-ups and firms to the nation.
By offering incentives for development and innovation, the administration expects to foster a flourishing ecosystem for technology that will help boost the country’s economic growth. El Salvador’s decision to adopt BTC as one of the country’s legal tender has sparked controversy, with detractors warning it could lead to increased money laundering and economic instability.
Some also anticipated Bukele’s government to collapse due to strained ties with the IMF. Nevertheless, Bukele defended the choice to provide financial inclusion for those who fall into the unbanked category and drive economic development in El Salvador.
The government aims to establish the nation as a front-runner in the cryptocurrency industry by removing taxes on technological advancements and supporting establishment of a BTC mining sector.
El Salvador Allegedly Working To Issue BTC Bonds
Besides a tax waiver, El Salvador recently passed legislation to release BTC-backed bonds. The bond, known as Volcano Bond, derived its name from the active El Salvador volcanoes. It will provide renewable energy to power the BTC mining economy the bonds aim to support.
Bukele announced the plan to raise $1 billion in Nov. 2021 to develop the Bitcoin mining economy that will run on sustainable energy. However, the nation had to postpone the bond’s issuance multiple times as a result of the last year’s crypto bear market.
The bill for digital assets was launched at the Legislative Assembly last November, where Nuevas Ideas, Bukele’s party, hold a huge majority. It passed with 16 voting against it and 62 legislators voting in favor.
At the start of this year, Bitfinex, a digital currency exchange, declared it would serve as the Volcano Token’s infrastructure provider. The Volcano Token is the virtual token to raise the bond issuance capital.
According to the exchange, the Volcano Token will aid El Salvador in paying off its debt, channel funds to BTC mining infrastructure, and finance the “Bitcoin City.”