El Salvador, the first country to establish Bitcoin. As a legal tender, it has been decided to eliminate all taxes on technological innovations. The move coincides with the establishment of the El Salvador National Bitcoin Office (ONBTC), also known as the “Bitcoin Office.”
When it comes to legalizing Bitcoin on Sept. 7, 2021, El Salvador's President Nayib Bukele sees the technology as a means to combat hyperinflation and reliance on the U.S. dollar. Over the past 18 months, El Salvador has reworked its bitcoin investment strategy and used capital gains several times to rebuild the country.
Moving forward with the strategy, Bukele believes in reducing tax requirements to speed up technology development. As promised, on April 1, Buckler formally introduced a bill to Congress effectively eliminating all income, property and capital gains taxes on technological innovations, "such as software programming, coding, applications and labor intelligence development, and computing and communications hardware manufacturing”
Supporting this initiative is the creation of the Bitcoin Office, a regulatory body that runs joint initiatives with Bitcoin entrepreneurs and companies. According to Asociación Bitcoin de El Salvador (El Salvador Bitcoin Association), ONBTC aims to “position the country as a world technological and economic powerhouse.” In addition to trying to revive the economy, Bukele is working to reshape El Salvador, including boosting tourism, fighting terrorism and creating a regional business hub.
In early 2023, El Salvador passed legislation providing the legal framework for Bitcoin-backed bonds Volcanic Bonds. The Volcano Bond term comes from the location of Bitcoin City, which will be a renewable cryptocurrency mining hub powered by the hydrothermal energy of the nearby Conchagua Volcano.
