<blockquote>
<p><strong>El Salvador has now passed a law that makes bitcoin the country's legal tender.</strong></p>
</blockquote>
<p>The US dollar will continue to be legal tender in E.S.</p>
<p>Anyone in E.S. who lacks the necessary technology does not have to accept Bitcoin.</p>
<blockquote>
<p><strong>Does this mean that when the law comes into effect in September 2021, other countries will presumably start treating bitcoin as a foreign currency?</strong></p>
</blockquote>
<p>No, I don't think you can make that assumption. Particularly as E.S. continues to use the US dollar.</p>
<p>A sudden change in the legal status of Bitcoin could be detrimental to some Bitcoin businesses. For example in jurisdictions where currency exchanges are subject to different regulations and registration requirements than other financial services.</p>
<p>We have seen that US, <a href="https://www.fca.org.uk/news/news-stories/consumer-warning-binance-markets-limited-and-binance-group" rel="nofollow noreferrer">UK</a> Canada and Japan have issued warnings to some unregistered but well-known Bitcoin businesses and issued strong warnings to the public about those unregistered businesses. These warnings mainly relate to Bitcoin as an investment but they illustrate that a change in Bitcoin's legal status might not always be a positive thing for everyone.</p>

CC BY-SA 4.0
2021-06-29T16:46:48.023Z
2021-06-29T17:30:54.217Z
2021-06-29T17:30:54.217Z
RedGrittyBrick
<p>It is my understanding that foreign currencies have a specific legal framework in many jurisdictions, for example that an exchange from one currency into another is not subject to tax. At the same time, many countries do not recognize bitcoin as a currency but rather an &quot;intangible asset&quot; or &quot;property&quot;.</p>
<p>El Salvador has now passed a law that makes bitcoin the country's legal tender. Does this mean that when the law comes into effect in September 2021, other countries will presumably start treating bitcoin as a foreign currency?</p>

<legal><taxes><el-salvador>
What are the implications of El Salvador's legal tender law to bitcoin's legal classification in other countries?
Vojtěch Strnad
# What are the implications of El Salvador's legal tender law to bitcoin's legal classification in other countries?

(Asked by: username_0 on 2021-06-29)

It is my understanding that foreign currencies have a specific legal framework in many jurisdictions, for example that an exchange from one currency into another is not subject to tax. At the same time, many countries do not recognize bitcoin as a currency but rather an "intangible asset" or "property".

El Salvador has now passed a law that makes bitcoin the country's legal tender. Does this mean that when the law comes into effect in September 2021, other countries will presumably start treating bitcoin as a foreign currency?

**Tags:** legal, taxes, el-salvador


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## 1 answers

### Answer by username_1 on 2021-06-29. Score: 1

> **El Salvador has now passed a law that makes bitcoin the country's legal tender.**

The US dollar will continue to be legal tender in E.S.

Anyone in E.S. who lacks the necessary technology does not have to accept Bitcoin.

> **Does this mean that when the law comes into effect in September 2021, other countries will presumably start treating bitcoin as a foreign currency?**

No, I don't think you can make that assumption. Particularly as E.S. continues to use the US dollar.

A sudden change in the legal status of Bitcoin could be detrimental to some Bitcoin businesses. For example in jurisdictions where currency exchanges are subject to different regulations and registration requirements than other financial services.

We have seen that US, [UK](https://www.fca.org.uk/news/news-stories/consumer-warning-binance-markets-limited-and-binance-group) Canada and Japan have issued warnings to some unregistered but well-known Bitcoin businesses and issued strong warnings to the public about those unregistered businesses. These warnings mainly relate to Bitcoin as an investment but they illustrate that a change in Bitcoin's legal status might not always be a positive thing for everyone.


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