Bitcoin is now legal tender in El Salvador

And so it begins

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And here is a link.

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It sounds great. I’m just afraid the president might have a sudden change of heart. After all, he is a businessman. And if he doesn’t, there is a chance great human rights violations will be discovered in El Salvador forcing somebody to get over there and give them all Freedom and Democracy.

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Que the CIA overthrow of El Salvador.

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That was pretty funny. Us posting at the exact same time from opposite sides of earth. :slight_smile:

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I couldn’t watch the last video for its style, but I found one that I think everyone will enjoy.

Here’s Jack Mallers of Strike who has been onboarding thousands of El Salvadorian’s to bitcoin giving barnstorming account of how El Salvador came to the point of making bitcoin legal tender.

More:
Strike appears to be a Lightening based bitcoin wallet with some bells and whistles, due to be open sourced in full as “bitcoin for countries”.

website: https://strike.me/
JackMallers: https://twitter.com/JackMallers
Related github: Zap · GitHub

Update
I followed Jack’s Twitter when I posted the above, but a few hours later… “Account does not exist”… and next day is back!

Update 20/06/21
Useful update on the early days of Bitcoin / Lightening Network implementation in El Salvador.

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I find this extremely interesting! Do you think his disappearance from Twitter really has to do with Bitcoin and El Salvador? Maybe we should all do some more searching on the interwebs.

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It seems unlikely but it’s very odd. Apparently it said suspended earlier, but now it’s “doesn’t exist”.

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I think this needs its own thread. Also, things that would not happen in safe network

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There is many countries with 0 taxes. He know that rich people bring jobs to locals. As it is hard to confiscate cryptocurrecy the main risk is the property if you have one.

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This is huge. It’s the breakthrough moment where Bitcoin “the network” launches a real-life experiment - using Bitcoin’s second layer for transactions - the Lightning Network.

It is huge. But I truly am afraid people may actually get killed over this.

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I think pomp has it right.

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The “99%” should come together and insist to the half dozen or so nations with aspirations of having the world reserve fiat global enslavement system that cryptocurrencies will be respected, or they’ll unify against those who would violate them… but I doubted that there were any real sovereign nations that would/could officially take this sort of stand. If it’s not just a show, it’s good that someone is taking a stand, though I don’t expect it to go well for them.

If the UN was what its pretense claims, all but a few of the nations within would insist on mutual defense of crypto.

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And the actual link.

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How do you define a “crypto entrepreneur”?

This might help apprender Espanol pronto

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Took Max Kieser less than a day to purchase a house there😂

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It’s back now.

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And a cross post from Reddit:

There are potentially huge US tax and reporting implications if El Salvador makes Bitcoin legal tender

On its face, it’s obviously great for Bitcoin if El Salvador adopts it as its legal tender. There are, however, nuances in the internal revenue code that make this news much bigger than most realize.

Most know that when trading foreign currencies gains must be reported and are taxed. But Section 988(e) carves out a de minimis exception for “personal transactions” where the gains do not exceed $200.

This is intended to allow travelers to transact in foreign currencies without all of the burdensome reporting requirements.

So far, Bitcoin has not qualified for this exception. Under IRS Notice 2014-21, the IRS opines that Bitcoin is “property” and not a “currency” because “ it does not have legal tender status in any jurisdiction .” There is a good argument, though, that once Bitcoin is “legal tender” in El Salvador, it will qualify for US individuals as a “nonfunctional currency” (under Section 988), allowing individuals to forgo reporting gains on small, daily transactions—“personal transactions.”

In other words ( tldr ), if Bitcoin is legal tender in El Salvador, US citizens could possibly freely transact in Bitcoin, as a “nonfunctional currency,” without a need to report gains of less than $200.

That’s potentially huge news for retail US citizens, but there is also huge news for US Bitcoin businesses.

Most US businesses use the US dollar as their unit of account for bookkeeping and reporting. However, there are cases where businesses operating primarily in foreign jurisdictions use a foreign currency—the unit of account does not have to be USD. The unit of account used by the business is the “ functional currency ” of the business and, perhaps, even an individual (see Sec. 985 IRC). If a business’s “functional currency” is a foreign currency, it does not have to bother with gains/losses related to USD fluctuations.

Again, under Notice 2014-21, Bitcoin cannot qualify as a functional currency. And, again, this could change if El Salvador adopts Bitcoin as legal tender.

Final tldr If Bitcoin becomes legal tender in El Salvador, IRS Notice 2014-21 may become partially null, relieving US individuals and business of huge tax and reporting burdens, paving the way for Bitcoin to legally and easily be used as a currency in the US.

Disclaimer: I am not a tax lawyer. The discussion and analysis on this should be much more detailed before financial decisions are made. I’ve written this to be used as a starting point for discussion with a tax lawyer.

Edit : Many have pointed out that Japan recognized Bitcoin as “legal tender” in 2017. They did not. A lot of misinformed authors incorrectly wrote that, but there is a distinction between Japan’s legal recognition of Bitcoin as a form of payment and what the Code/Regs/precedent considers “legal tender.” I think (and hope) that El Salvador will truly recognize Bitcoin as legal tender.

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