The Legislative Assembly of El Salvador will eliminate customer identity verification (KYC) for transactions less than $25,000. The Bitcoin Office of El Salvador confirmed that financial and crypto companies used to resort to KYC with transactions starting at $200. According to the Assembly, the reform will encourage tourism in El Salvador, which would increase the flow of resources.
The Legislative Assembly of El Salvador approved a reform to the Tax Code to request clients’ Unique Identity Document (DUI) for financial transactions, including cryptocurrencies, only for amounts of $25,000 or more. Local crypto companies will not be able to verify their customer’s identity (Know Your Customer) or KYC for smaller amounts.
The Bitcoin Office of El Salvador confirmed that prior to the legislation, financial and crypto companies could confirm the identity of the client with transactions from $200. The reform seeks to encourage Bitcoin adoption and investment in El Salvador.
Media outlet CriptoNoticias took on X to comment such event in the following terms:
““El Salvador continues to leverage its first-mover advantage as a leading destination for new capital markets in Bitcoin.”
These were the words of the National Bitcoin Office (ONBTC) after updating the KYC regulations, which required verifying identity and private data when making transactions with bitcoin equal to or greater than USD 200.
With the law amendment, KYC will only be mandatory for transactions equal to or greater than 25 thousand dollars. (…) According to Stacy Herbert, a member of the ONBTC, the modification of the law will be made in the interest of preserving privacy.”
El Salvador Seeks to Encourage Investment and Tourism with the Elimination of KYC
The new adjustments will be applicable anywhere where Bitcoin transactions are carried out, such as Bitcoin Beach, as well as companies that operate in El Salvador such as: Strike, Bitfinex, FOLD, Blink BTC, BitoBanx, K1 Technology or Tiankii, according to The Bitcoin Office.
Representative Dania González maintained that the initiative will eliminate the requirements of the Ministry of Finance to request DUI. The deputy and president of the Financial Commission, Dania González, elaborated as follows:
“With this reform, investors will also benefit from faster processes. This is important because growth in the technology industry is expected in our country, which is why we need to establish regulations that encourage this sector. “Our country is growing in tourism thanks to the security measures that we have supported, this means direct contributions to the economy.”
Prior to the reform of the Tax Code, for each transaction for $200 or more, operators had to establish on the invoice the names, signatures and DUI number of the person who delivered and the person who received the document. Now, the same bureaucratic process is carried out only for amounts greater than $25,000.
El Salvador Encourages the Use of Cryptocurrencies Prior to the Bitcoin Halving
According to the Assembly, “The amendments contemplate modifications to article 114 which indicates that, when the value of “If the operation exceeded or was equal to 200 dollars, the names, signatures and Unique Identity Document (DUI) number of the person who delivered and received the document must be established on the original invoice.”
El Salvador’s total profits thanks to Bitcoin have exceeded $60 million. The above, in the midst of the cryptocurrency price rally. With 2,848 BTC in its possession, the country has taken advantage of the recent rise in Bitcoin price. Bitcoin has surpassed the $67,000 mark.
By Audy Castaneda
