- Samson Mow has cleared the air on the true state of Bitcoin in El Salvador.
- Despite the amendment to its Bitcoin laws, El Salvador is still buying BTC.
JAN3 CEO and crypto stakeholder Samson Mow recently explained Bitcoin’s (BTC) legal tender status in El Salvador. His comments come amid various reports that have raised confusion about whether Bitcoin is legal in El Salvador.
Samson Mow Throws Light on Bitcoin Status in El Salvador
Taking to social media platform X, Samson Mow commented that Bitcoin’s legal status in El Salvador is complicated.
“But the short answer is: Bitcoin both is and isn’t legal tender,” Mow noted.
Mow pointed out that many questions are still unanswered concerning the Bitcoin situation in El Salvador. He empathized with Bitcoiners who have expressed concerns about their future, given their investment stake in El Salvador.
For context, the Bitcoin situation in El Salvador comes after the government announced a decision on some of its core Bitcoin laws in the country. As summarized in CNF’s earlier news story, the decision makes Bitcoin’s use voluntary, limiting its role in government transactions.
According to the story, this move comes as the country negotiates a $1.4 billion loan with the International Monetary Fund (IMF). The IMF has consistently urged El Salvador to reconsider its Bitcoin strategy, citing potential risks to financial stability and fiscal integrity.
Back to Mow, he highlighted in his post that official comments on the Bitcoin Law amendments are lacking. To give Bitcoin holders closure, Mow said his firm JAN3 did an analysis and manually translated the edits and amendments so that none of the nuances are lost.
He explained that the amendments to the Bitcoin Law are very clever, allowing compliance with the IMF agreement. According to JAN3’s analysis, the Bitcoin Law still exists. However, Bitcoin is no longer classified as currency, which makes the coin optional or voluntary.
“So this is why Bitcoin is and isn’t legal tender. It is defined as legal tender but lacks the thing that actually makes it legal tender,” Mow pointed out.
Bitcoin’s Utility Limited in El Salvador
Mow went on to emphasize further Bitcoin’s restrictions in El Salvador. Besides prohibiting Bitcoin’s use for tax payments, the government can no longer accept BTC for other payments, such as incorporating a company. Bitcoin’s use is also limited to the passport program, future citizenship by investment programs, and the $12 tourist fee at the airport.
Also, there are no capital gains on Bitcoin, meaning individuals residing in El Salvador can still spend the asset. Mow also noted that removing Bitcoin as currency is likely in line with the more mainstream acceptance that Bitcoin is an asset, not money or a currency.
Another major change in the Bitcoin Law is that the government cannot touch BTC, but everyone else can. Mow explained that the state does not need to help facilitate BTC transactions, paving the way for a Chivo phase-out or sale.
While Mow said that the Chivo wallet had its challenges, especially with many bugs, he noted that it served as an important fiat/BTC bridge. Hence, the phasing out of Chivo could lead to the deprecation of Bitcoin payment support.
Despite the ongoing pressure from the IMF, El Salvador recently increased its Bitcoin holdings by purchasing 21 BTC. This purchase has raised the government’s total BTC reserves to 6,068.18 BTC, as highlighted in our previous article.
