El Salvador has just become the first country in the world to officially and legally recognize cryptocurrency as a form of money. After its president, Nayib Bukele, announced new legislation that would make Bitcoin (BTC) legal tender, it didn’t take long for the measure to be approved by lawmakers and converted into law. The entire process took less than a week and Jason Simon, a cryptocurrency and FinTech expert, explains what this means to the cryptocurrency ecosystem.

President Bukele announced at the end of last week that he was preparing to introduce a bill to make BTC legal tender. He didn’t waste time fulfilling his promise, and the legislation passed the Legislative Assembly with a supermajority yesterday. The president said yesterday, as the bill was approved yesterday, that he would sign off on the historic law by the end of the day today at the latest. He made his comments in a Twitter Spaces conversation that attracted 22,000 listeners yesterday, adding that, after he signs the bill, the new law will take effect immediately, but explaining that the government has 90 days to establish the proper infrastructure to support its new legal tender.

Simon asserts, “This should be seen as a monumental achievement for cryptocurrency, fulfilling one of the tenets that were initially laid out when Satoshi wrote his Bitcoin whitepaper. Cryptocurrency was never meant to be viewed as an investment vehicle but, rather, a legitimate currency that could be used alongside existing fiat. That goal is now starting to be achieved.” Although the recognition of BTC as legal tender in El Salvador won’t have a major impact on a global financial scale, it is an indication that cryptocurrency is finally being viewed as a legitimate currency.

President Bukele is going to meet with the International Monetary Fund (IMF) today, as well, to discuss El Salvador’s plans for implementing a regulated and controlled infrastructure. The president explains that $150 million will be held in a trust fund by the government for the development of the new infrastructure, as well as to help cover merchant risks. An “official” cryptocurrency wallet will be introduced; however, users will be able to choose their own. Adds Simon, “As part of the new legislation, accepting BTC is going to be mandatory for all businesses, just like existing fiat, whether it be the Salvadoran colon or the US dollar.”

In addition to defining BTC as legal tender, El Salvador is prepared to attract cryptocurrency enthusiasts. It is offering permanent residency to anyone who invests at least three BTC in the country, currently around $108,000. There will be zero capital gains tax on BTC and tax payments will be accepted using the digital currency. The country’s government is establishing a program to educate its citizens on the cryptocurrency ecosystem and its uses, and is also considering the possibility of allowing cryptocurrency mining. That, however, would be available only to environmentally-friendly operations, according to President Bukele.