Bitcoin Remains Legal Tender in El Salvador
El Salvador has reiterated its dedication to embracing bitcoin as legal tender, despite the International Monetary Fund's (IMF) repeated appeals for the country to abandon the cryptocurrency. According to El Salvador Vice President Félix Ulloa, not only will the bitcoin law be upheld, but the cryptocurrency currently holds the "greatest credibility in the entire world."
Bitcoin Law to Continue in Second Presidential Term
In an interview with Reuters, Vice President Ulloa stated that bitcoin will remain as legal tender in El Salvador during President Nayib Bukele's second term, even after the IMF urged the country to drop the cryptocurrency during negotiations for a billion-dollar loan. The upcoming general elections in El Salvador, scheduled for Feb. 4, will determine the president, vice president, and members of the Legislative Assembly.
Government's Firm Stance on Bitcoin
Vice President Ulloa emphasized that the Salvadoran government has no intention of reversing its decision to adopt bitcoin as legal tender. He pointed out that the recent approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) has further solidified their resolve. El Salvador became the first country in the world to establish bitcoin as legal tender alongside the U.S. dollar in September 2021. Vice President Ulloa said, "Not only will it (the law) be maintained … At this moment, it enjoys the greatest credibility in the entire world."
Future Plans for Bitcoin in El Salvador
If President Bukele and his New Ideas party secure a significant victory in the upcoming election, the Salvadoran government will proceed with its plans to launch bitcoin-backed bonds in the first quarter of 2024. Additionally, the construction of Bitcoin City, a proposed tax-free crypto haven in eastern El Salvador, will move forward, along with the issuance of passports to investors contributing $1 million in cryptocurrency.
IMF's Concerns and Recommendations
Following the conclusion of the IMF Executive Board's Article IV consultation with El Salvador, the Fund published a report on Jan. 24. The report acknowledged the importance of digital means of payment, such as the Chivo e-wallet, in boosting financial inclusion. However, the IMF stressed the necessity for strict regulation and oversight of the Chivo and bitcoin ecosystem. The directors of the IMF also emphasized the risks associated with the use of bitcoin on financial stability, integrity, consumer protection, and fiscal contingent liabilities. Consequently, they urged the authorities to remove bitcoin's legal tender status by narrowing the scope of the Bitcoin law. Some directors also expressed concerns about issuing bitcoin-backed bonds.
El Salvador's Resilience in the Face of IMF's Calls
The IMF has consistently urged El Salvador to reconsider bitcoin as legal tender, starting with warnings in November 2021 and January 2022 regarding its risks and costs. In February 2023, the IMF released a comprehensive report outlining specific issues. Despite these warnings, El Salvador has remained steadfast in its commitment to bitcoin.
What are your thoughts on El Salvador's unwavering dedication to bitcoin, despite the IMF's repeated appeals for change? Share your opinions in the comments section below.
Frequently Asked Questions
How Much of Your IRA Should Be Made Up Of Precious Metals
It is important to remember that precious metals can be a good investment for anyone. They don't require you to be wealthy to invest in them. There are many ways to make money on silver and gold investments without spending too much.
You could also consider buying physical coins like bullion bars, rounds or bullion bars. Shares in precious metals-producing companies could be an option. Or, you might want to take advantage of an IRA rollover program offered by your retirement plan provider.
You will still reap the benefits of owning precious metals, regardless of which option you choose. These metals are not stocks, but they can still provide long-term growth.
And unlike traditional investments, they tend to increase in value over time. So, if you decide to sell your investment down the road, you'll likely see more profit than you would with traditional investments.
Can I have physical gold in my IRA
Gold is money, not just paper currency or coinage. People have been using gold for thousands of years to store their wealth and protect it from economic instability and inflation. Investors today use gold to diversify their portfolios because gold is more resilient to financial turmoil.
Many Americans today prefer to invest in precious metals, such as silver and gold, over stocks and bonds. It's not guaranteed that you'll make any money investing gold, but there are several reasons it might be worthwhile to add gold to retirement funds.
Another reason is that gold has historically outperformed other assets in financial panic periods. Between August 2011 and early 2013 gold prices soared nearly 100 percent, while the S&P 500 plunged 21 percent. Gold was one asset that outperformed stocks in turbulent market conditions.
The best thing about gold investing is the fact that there's virtually no counterparty risk. If your stock portfolio goes down, you still own your shares. However, if you have gold, your value will rise even if the company that you invested in defaults on its loans.
Gold provides liquidity. This means that you can sell gold anytime, regardless of whether or not another buyer is available. Gold is liquid and therefore it makes sense to purchase small amounts. This allows you to take advantage of short-term fluctuations in the gold market.
Can the government take your gold
Your gold is yours and the government cannot take it. It is yours because you worked hard for it. It belongs to your. However, there may be some exceptions to this rule. Your gold could be taken away if your crime was fraud against federal government. You can also lose precious metals if you owe taxes. However, even if you don't pay your taxes, your gold can be kept as property of the United States Government.
Who holds the gold in a gold IRA?
The IRS considers anyone who owns gold to be “a form money” and therefore subject to taxation.
You must have at least $10,000 in gold and keep it for at most five years to qualify for this tax-free status.
Owning gold can also help protect against inflation and price volatility, but it doesn't make sense to hold gold if you're not going to use it.
You will need to declare the value of gold if you intend on selling it one day. This could impact how capital gains taxes you owe for cash investments.
It is a good idea to consult an accountant or financial planner to learn more about your options.
Statistics
- You can only purchase gold bars at least 99.5% purity. (forbes.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
External Links
cftc.gov
finance.yahoo.com
investopedia.com
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- You want to keep gold in your IRA at home? It's not exactly legal – WSJ
How To
Three Ways to Invest In Gold For Retirement
It is important to understand the role of gold in your retirement plan. If you have a 401(k) account at work, there are several ways you can invest in gold. You may also want to consider investing in gold outside of your workplace. A custodial account can be opened by a brokerage firm like Fidelity Investments if you already have an IRA. You may also want to purchase precious metals from a reputable dealer if you don’t already have them.
These are the three rules to follow if you decide to invest in gold.
- Buy Gold with Your Money – You don't need credit cards, or to borrow money to finance your investments. Instead, deposit cash into your accounts. This will help protect you against inflation and keep your purchasing power high.
- Physical Gold Coins to Own – Physical gold coin ownership is better than having a paper certificate. The reason is that it's much easier to sell physical gold coins than certificates. Also, there are no storage fees associated with physical gold coins.
- Diversify your Portfolio – Don't put all your eggs in one basket. In other words, spread your wealth around by investing in different assets. This reduces risk and allows you to be more flexible during market volatility.
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By: Kevin Helms
Title: El Salvador Reaffirms Commitment to Bitcoin Despite IMF's Calls for Change
Sourced From: news.bitcoin.com/el-salvador-stands-firm-on-bitcoin-defying-imfs-renewed-call-to-drop-btc-as-legal-tender/
Published Date: Sat, 03 Feb 2024 23:30:55 +0000
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