Bitcoin to Remain Legal Tender in El Salvador
El Salvador has reaffirmed its commitment to embracing bitcoin despite the International Monetary Fund's repeated calls for the country to drop the cryptocurrency as legal tender. Vice President Félix Ulloa emphasized that not only will El Salvador's bitcoin law be maintained, but the cryptocurrency also "enjoys the greatest credibility in the entire world."
In an interview with Reuters, Ulloa stated that bitcoin will remain 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. General elections are scheduled to be held in El Salvador on Feb. 4, where the president, vice president, and all 60 deputies of the Legislative Assembly will be elected.
Government's Decision to Uphold Bitcoin Law
Ulloa affirmed that the Salvadoran government has no intention of reversing its decision to make BTC 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 only strengthened 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. Ulloa stated, "Not only will it (the law) be maintained… At this moment, it enjoys the greatest credibility in the entire world."
If President Bukele and his New Ideas party secure a landslide victory in Sunday's election, the Salvadoran government will proceed with its plans to launch bitcoin-backed bonds in the first quarter of 2024. Ulloa also confirmed that the construction of Bitcoin City, President Bukele's proposed tax-free crypto haven in eastern El Salvador, would proceed. Additionally, the government plans to issue passports to investors contributing $1 million in cryptocurrency.
IMF's Concerns and El Salvador's Resilience
The International Monetary Fund (IMF) has repeatedly urged El Salvador to reconsider bitcoin as legal tender, citing risks and costs. However, El Salvador remains steadfast in its commitment to bitcoin. The IMF has raised concerns about the risks associated with issuing bitcoin-backed bonds and the need for strict regulation and oversight of the Chivo e-wallet and bitcoin ecosystem.
The IMF's warnings date back to November 2021, with subsequent warnings in January 2022 and a detailed report in February 2023. Despite these warnings, El Salvador stands firm in its decision to embrace bitcoin as legal tender.
What are your thoughts on El Salvador reaffirming its commitment to bitcoin despite the IMF's calls to drop it as legal tender? Share your opinions in the comments section below.
Frequently Asked Questions
How can I choose an IRA?
The first step to finding an IRA for you is understanding your account type. This is whether you want a Roth IRA, a traditional IRA, or both. You will also need to know how much you can invest.
The next step is to choose the best provider for you. Some providers offer both accounts while others are specialized in one.
Last, consider the fees associated to each option. Fees may vary from one provider to another and could include annual maintenance fees as well. Some providers charge a monthly cost based on how many shares you own. Others only charge once per quarter.
How much should precious metals make up your portfolio?
Physical gold is the best investment to protect yourself against inflation. This is because you not only get the current price but also the future value when you invest precious metals. Your investment will increase in value as the prices rise.
You will be eligible for tax benefits if you keep your investments in place for at least five consecutive years. And if you sell them after this period, you will have to pay capital gains taxes. Learn more about how you can buy gold coins on our website.
Which is better: sterling silver or 14k-gold?
Both gold and silver make strong metals. Sterling silver is more affordable than sterling silver which has only 24% pure silver.
Sterling silver is also called fine silver. It is made from a combination silver and other metals, such as zinc and copper.
Gold is generally considered to be very strong. It is very difficult to separate it from its metal counterpart. If you dropped an object on top to a gold piece, it would shatter into thousands rather than breaking into two halves.
However, silver doesn't have the same strength as gold. A sheet of silver would likely bend and fold if you dropped an item on it.
Silver is often used in jewelry and coins. Silver's value can fluctuate depending on the supply and demand.
What precious metals do you have that you can invest in for your retirement?
Knowing what you have saved so far and where you plan to save money in the future is the first step towards retirement planning. If you don't know how much you currently have saved, start by taking an inventory of everything you own. You should list all savings accounts, stocks and bonds, mutual funds certificates of deposit (CDs), annuities, life insurance policies, annuities 401(k), real estate investments, and any other assets like precious metals. Take all of these items and add them together to find how much you have left for investment.
If you are under 59 1/2 you should consider opening a Roth IRA Account. A Roth IRA, on the other hand, allows you to subtract contributions from your taxable revenue. However, you can't take tax deductions from future earnings.
If you decide that you need more money you'll need another investment account. Start with a regular broker account.
What type of IRA is used for precious metals?
An Individual Retirement Account (IRA) is an investment vehicle most employers and financial institutions offer. A IRA is a way to make money and allow it to grow tax-deferred, until you withdraw it.
You can save taxes by setting up an IRA and then paying them off when you retire. This means that you can deposit more money into your retirement plan than have to pay taxes on it tomorrow.
The beauty of an IRA is that contributions and earnings grow tax-free until you withdraw the funds. There are penalties for early withdrawal if you do.
After 50 you can still make contributions to your IRA. There is no penalty. If you decide to withdraw your IRA from retirement, you will owe income taxes as well as a 10% federal penalty.
Refunds received before the age of 591/2 are subject to a penalty of 5% from the IRS. Withdrawals between ages 59 1/2 and 70 1/2 are subject to a 3.4% IRS penalty.
Withdrawal amounts exceeding $10,000 per year are subject to a 6.2% IRS penalty.
Can a gold IRA make you money?
Yes, but it's not as simple as you think. It all depends upon how much risk you are willing and able to take. A $10,000 investment per year for 20 years could lead to $1 million by retirement age. If you try to put all your eggs into one basket, you will lose everything.
Diversify your investments. Inflation makes gold a good investment. It is important to invest in assets that increase with inflation. Stocks excel at this because they rise with increased profits. This is also true of bonds. They pay interest every year. They are great during economic growth.
But what happens if inflation is not present? In deflationary periods stocks and bonds both fall in value. Investors should refrain from putting all their savings into one type of investment such as a mutual fund or bond.
Instead, they should invest in a mix of different funds. They could invest both in stocks and bonds, for instance. Or they could invest in both cash and bonds.
This gives them exposure to both sides. They can see both the inflation and the deflation sides of the coin. They will still experience a return with time.
Does a gold IRA earn interest?
It all depends upon how much money you invest. If you have $100,000 to spare, then yes. You will not be able to answer if your income is less than $100,000
How much money you place in an IRA will determine how it earns interest.
You should consider opening a regular brokerage account instead if you put in more than $100,000 per year for retirement savings.
There you will earn more interest, but also be exposed to higher risk investments. If the stock market crashes, you don't want all your money to be lost.
A IRA will be more beneficial if you can only contribute $100,000 annually. At least until the market starts growing again.
- Same tax rules as traditional IRA SEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less Before setting up a Silver IRA, understand the fees and IRS restrictions. (sltrib.com)
- Silver must be 99.9% pure • (forbes.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How to Open a Precious Metal IRA
Precious metals are a highly sought-after investment vehicle. Because they offer higher returns than traditional investments such as stocks and bonds, they are very popular. However, you need to be careful when investing in precious materials. If you want to open your own precious metal IRA account, here's what you should know first.
There are two types of precious metal accounts. They are paper gold and silver certificates (GSCs) and physical precious metals accounts. Each type has its pros and cons. GSCs offer easy access and trade, while physical precious metals accounts provide diversification benefits. You can read more about them below.
Physical precious Metals accounts consist of bullion, bullion, and bars. This option offers diversification benefits but also has some drawbacks. It is expensive to buy, store, and sell precious metals. Due to their size, it can be difficult for them to be transported from one place to another.
On the other hand, paper gold and silver certificates are relatively inexpensive. They can also be traded online and are easily accessible. These make them ideal for people who don’t want to invest directly in precious metals. But they don't offer as much diversification as their physical counterparts. They are also backed by government agencies like the U.S. Mint so their value could decline if inflation rates rise.
Choose the best account for you financial situation when opening a precious metal IRA. The following are important factors to consider before opening an IRA.
- Your tolerance level
- Your preferred asset allocation strategy
- How much time do you have to invest
- Whether or not you plan on using the funds for short-term trading purposes
- Which type of tax treatment would you prefer
- Which precious metals would you prefer to invest in
- How liquid do your portfolio need to be
- Your retirement age
- You'll need somewhere to keep your precious metals
- Your income level
- Your current savings rates
- Your future goals
- Your net worth
- Special circumstances that might affect your decision
- Your overall financial situation
- Your preference between physical or paper assets
- Your willingness to accept risks
- Your ability to deal with losses
- Your budget constraints
- Financial independence is your goal
- Your investment experience
- Your familiarity in precious metals
- Your knowledge about precious metals
- Your confidence and faith in the economy
- Your personal preferences
Once you've chosen the right type of precious Metal IRA to suit your needs, it is time to open a dealer account. These dealers can be found via referrals, word-of-mouth, and online research.
After you have opened your precious metal IRA account, you will need to decide how much money to put in it. It's important to note that each precious metal IRA account carries different minimum initial deposit amounts. Some account require just $100, while some allow you to put up to $50,000.
The amount you invest in your precious-metal IRA is entirely up to you, as stated above. You might choose to make a larger initial investment if your goal is to build wealth over the long-term. If you are planning to invest small amounts each month, a lower initial investment might be better.
As far as the actual precious metals used in your IRA go, you can purchase any number of different types of investments. The most popular are:
- Bullion bars and rounds of gold, as well as coins
- Silver – Rounds or coins
- Platinum – Coins
- Palladium-Bar and Round Forms
- Mercury – Round and Bar Forms
By: Kevin Helms
Title: El Salvador Reaffirms Commitment to Bitcoin Despite IMF's Calls
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