If bitcoin does become legal tender in El Salvador, does that mean when a US person spending/exchanging it there (or any where in the world) would not be subject to capital gains tax on the spend/exchange? Currently the IRS has the position that because bitcoin does not have legal tender status in any jurisdiction, it is not a foreign currency. It is only considered a virtual currency and subject to capital gains reporting and tax. But what would happen if bitcoin becomes in both categories at the same time: a virtual currency and a legal tender foreign currency?