The government of El Salvador will reportedly exempt investors from paying a upper-case letter gains taxation and an income tax on Bitcoin (BTC), according to a presidential legal counsel.

Javier Argueta, a legal adviser to President Nayib Bukele, is looking to encourage strange investment through major tax breaks on Bitcoin, Agence France-Presse reported on Sept. 10.

"If a person has assets in Bitcoin and makes high profits, at that place will be no tax. This is done obviously to encourage foreign investment," Argueta said, adding that El Salvador will impose no taxes on "either the capital increase or the income."

Argueta reportedly noted that the Salvadoran government would exist actively tracing Bitcoin transactions on El Salvador'due south official BTC wallet, Chivo, to combat the potentially illegal utilize of the cryptocurrency. "Nosotros are implementing a series of recommendations from international institutions against money laundering," he said.

The Chivo wallet would also temporarily halt Bitcoin transactions on the awarding if the value of Bitcoin collapsed to minimize the impact of extreme volatility or price fluctuations.

Related: El salvador'south largest bank partners with Flexa for Bitcoin payments

Last Tuesday, Republic of el salvador became the first land in the earth to adopt Bitcoin as legal tender, requiring all local merchants to have BTC as a means of payment. In cooperation with global companies similar Bitso crypto exchange and Silvergate Depository financial institution, El Salvador launched the official BTC wallet known every bit Chivo, allowing users to convert Bitcoin (BTC) transactions into the United States dollar or withdraw without incurring transaction fees using a special ATM.

As previously reported, the Chivo wallet was temporarily taken downward for maintenance on the launch day. According to several social media reports, some Chivo wallet users are allegedly yet experiencing major issues with transacting or withdrawing from Chivo after El Salvador fixed the crypto wallet last calendar week.