Summary of the Article
• El Salvador is eliminating all taxes related to technology innovation, allowing digital assets to enter a $1 trillion market.
• This move was met with cheers on Crypto Twitter and is seen as great news for the crypto industry.
• The country also plans to attract institutional investors and young crypto talent with its Bitcoin-backed Volcano bonds, which are expected to launch this summer.
El Salvador Joins Dubai in Tech Tax Elimination
Last month, President Bukele of El Salvador signed a document called The Innovation and Technology Manufacturing Incentives Act that would eliminate taxes on capital gains, import tariffs, AI programming software programming, and hardware manufacturing. This move has been widely celebrated among the crypto community on social media platform Crypto Twitter and is seen as a major step forward for the nation in becoming a prominent crypto hub similar to Dubai in the UAE.
Crypto Community Approves of Move
The innovative legal framework created by President Nayib Bukele’s government was met with praise from the cryptocurrency industry due to its potential impact on attracting institutional investors and young crypto talent into El Salvador’s economy. Such an increase in investment could potentially open up a $1 trillion market for digital assets within the country.
In order to further incentivize such investments, El Salvador has created Bitcoin-backed Volcano bonds. Initially planned for 2022 but postponed due to volatile conditions within the crypto markets, these bonds were enabled once Bitcoin broke through $30,000 and allowed El Salvador to pay off an existing $800 million maturing bond debt. Bitfinex recently announced that these bonds are expected to launch sometime between June and September this year.
Overall, it looks like El Salvador is well on its way towards becoming one of Latin America’s most prominent bitcoin hubs thanks largely in part due President Bukele’s leadership during this process. With zero tax incentives now available for technology businesses along with upcoming Bitcoin-backed Volcano bonds expected over summer 2021 – it will be interesting to follow how this story develops over time!