Why El Salvador's bitcoin play is the best move against the global tax?
Hello everyone...
The crypto market is moving once again, but it is not because Elon musk has made prices fall, but because Nayib Bukele, the president of El Salvador has said through unofficial announcements that he plans to adopt bitcoin as his country's currency, which has attracted the attention of many important people in the crypto sphere as CEO of Tron, Justin Sun, and the CEO of Binance, Changpeng Zhao, among others. And it has also led other nations to follow suit, such as Paraguay.
But that has not stopped there, since through several tweets Nayib has mentioned that even the government of El Salvador plans to help Bitcoin hodlers to obtain citizenship or stay in El Salvador, and thus settle foreign workers to bring qualified personnel.
But thinking further, why is it possible that El Salvador has taken these measures, and why does it represent a breakthrough for its economy?
Bitcoin as an official currency, an excellent move.
If you remember what happened a few days ago in London, when the G7 finance ministers of the world's richest countries agreed to impose a global tax on multinationals of 15%, this was mainly to put an end to the struggle for global or country-specific tax rates and make companies pay taxes wherever they are located.
This is a setback for the largest companies or multinationals, as companies can set up branches in countries with lower corporate tax rates and declare their profits there. So they only pay the local tax rate, even if the profits come mainly from sales made in rich countries. The flip side of this measure is for the collection of taxes to help powerful economies that have been hit by the pandemic.
Now the adoption of bitcoin as the official currency of the country is an excellent move against global tax measures since El Salvador would not be governed by the exchange control of any country or euros, or dollars or yuan or rubles, therefore should not be accountable or follow any rules on taxes imposed by the countries that own these currencies.
So el Salvador by taking action and legalizing a decentralized currency as the official currency of the country is allowing multinationals to settle in the country which brings a great benefit to the population of the country and the government since can set their tax rates and demand them in bitcoin.
Will it is a breakthrough for the economy of El Salvador?
Yes, because while other countries are closed to cryptocurrencies and qualify them as a scam or fraud, El Salvador bets on them and promotes them, bringing economic, technological, and business development to their country.
But not all are pros in this story, it is also worth analyzing the possible cons since the fact that a country wants to change its economy from fiat money to crypto money involves many changes in monetary policy, perhaps controls or measures equal to the banks, or continuous monitoring. Also the need to establish a stable currency to avoid losses when bitcoin goes down, among other things.
But, apart from the pros and cons of El Salvador's decision, we can see clear evidence of what is being achieved to achieve a decentralized world. the decentralized economy is making its way very fast, it is incredible to see how in just a few months there has been a massive adoption, taskmaster always talks about a future very dependent on cryptocurrencies and we are seeing how this thinking is already taking its course, because the other third world or underdeveloped nations, seeing the success that el Salvador has with its economic measures, will want to do the same, maybe we will see how Nigeria will be the next country to adopt bitcoin or other cryptocurrencies in this way.
Keep your eyes open, the future is today...
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