El Salvador will exempt foreigners from paying bitcoin taxes to encourage investment, a report said | Currency News | Financial and business news

Jose Cabezas / Reuters

• El Salvador will exempt foreign investors from paying taxes on Bitcoin profits and income, AFP reported.
• An adviser to the President of El Salvador said the country wanted to encourage foreign investment.
• The Central American nation recently became the first country in the world to declare Bitcoin legal tender.
• Check out Insider’s business page for more stories.

El Salvador, which this month became the first country to adopt Bitcoin as legal tender, will exempt foreign investors from paying taxes on their profits from the cryptocurrency, according to an AFP report.

“There is no tax to be paid on either the capital increase or the revenue,” said Javier Argueta, a legal advisor to Bitcoin’s President of El Salvador, Nayib Bukele, in a report released on Friday.

“This (is being done) obviously to encourage foreign investment,” Argueta was quoted as saying. The Central American country introduced Bitcoin as legal tender on September 7, among other things to combat ongoing hyperinflation.

The Argueta government also hopes that as a legal payment option, Bitcoin will cut millions of dollars in commissions on remittances from abroad, primarily the United States.

The rocky adoption of Bitcoin in El Salvador, which included technical issues with the country’s national crypto wallet, Chivo, has been cited as a factor in the price of Bitcoin falling by at least 17% on the country’s launch day. Bitcoin is joining the U.S. dollar as the country’s national currency, but the move has met local protests and skepticism about its use, in part because the cryptocurrency is prone to volatile prices.

Bitcoin slipped 0.2% to $ 47,805 on Wednesday.