7 Countries that could follow El Salvador and make Bitcoin Legal Tender
On June 10, 2021, El Salvador booked its place in history as the first country to adopt bitcoin as its legal currency. This landmark decision could pave the way for other countries to accept bitcoin as legal tender.
El Salvador has been a constant source of discussion since its landmark decision.
Developing nations are in awe of this decision and wondering about doing the same in their nations as well.
Many Politicians of such developing nations have embraced this step of El Salvador on Twitter. And by putting laser eyes in their picture they show their support to bitcoin and cryptocurrencies.
Since February, the laser eyes meme has flooded the internet. The underlying meaning of this meme is that any person who puts it on their picture is:
- A supporter of bitcoin and cryptocurrencies.
- They are laser-focused and optimistic about bitcoin’s price rising above the $100,000 mark.
In this article, we’ll discuss the 7 countries that have been vocal in their support of bitcoin through their political leaders. And Such nations, in a month or two could very well be following El Salvador’s footsteps and make bitcoin a legal tender.
List of countries
Paraguay could become the 2nd country to book its place in the ‘Adoption of Bitcoin’ chapter in history. Carlitos Rejala, a Congressman and the National Deputy of Paraguay, has called for the support of his government to take similar action like El Salvador.
Rejala is set to present two bills next month in the Paraguayan national assembly. The first bill will aim to simplify regulations for crypto mining and crypto exchanges, to attract businesses from all over the world. After the assent of the first bill, the second bill will push for Bitcoin to get accepted as legal tender.
It’s important to note, Paraguay provides electricity at a very cheap rate. The cost of electricity in Paraguay is around $0.05 per kilowatt-hour, one of the cheapest in the world.
Hydropower is the main source of electricity generation in Paraguay. Only 10% is used in the country and almost 90% of the energy generated gets exported at a very low rate to its neighboring countries.
The amount of electricity usage by miners and its cost has always been a point of discussion. Low-cost electricity can provide relief to miners to carry on their operations. This low-cost electricity will attract miners from all over the world to Paraguay.
Gabriel Silva, a member of Parliament in Panama, tweeted in support and appreciation of El Salvador’s move to make bitcoin its legal currency. He expressed his view that to become a true technology and entrepreneurship hub, Panama has to support cryptocurrencies.
He plans to present a bill next month that could make the adoption of cryptocurrencies as a legal tender. He also said that making this bill as legislation will not be as quickly done as it was in El Salvador but he truly believes that it can be achieved as they have a large support of citizens. With this announcement, Panama becomes the second country after Paraguay which is on the brink of granting the status of legal tender to cryptocurrencies.
Panama due to its liberalized tax laws & regulations serves as headquarters for many transnational companies and has created its reputation as a tax haven. Accepting Crypto and making Crypto-friendly laws will only enhance their reputation as a tax haven and many crypto-related companies will get attracted to establish their headquarters in Panama.
Panama, like El Salvador, is a dollarized nation and they don’t have the power to print their paper currency. Also, the adoption of cryptocurrencies as a legal tender can solve their problem of overreliance on the U.S. dollar.
Francisco Sánchez, the National Deputy for Neuquén, Argentina, added laser eyes in his Twitter picture and appreciated the move of El Salvador to make bitcoin its official currency. This appreciation post indicates the potential move of Argentina in this direction.
Since the start of 2020, Argentina is experiencing a boom in crypto mining and its user base. Mining has increased due to the reason for subsidised electricity given by the government to the miners for their mining operations. According to Bloomberg, the subsidies are so high that even with the recent crash in prices, Argentinian miners are still in the green.
Also, the user base of cryptocurrency is increasing in Argentina owing to their chronic inflationary economy, rising debt on the nation, increasing poverty, and incompetence of the government in policy-making. These factors give a boost to the citizens of Argentina to invest in bitcoin and other cryptos. They are more willing to take a chance on the volatile nature of cryptocurrency than the inept policy-making by their leaders.
Several Lawmakers from Mexico have come forward and supported the move of El Salvador and also placed emphasis on the need of legalizing cryptocurrencies in their country. Likes of Senator Indira Kempis have congratulated El Salvador’s president to start ‘this revolution’ and she also added laser eyes to her Twitter profile picture.
Moreover, Senator Eduardo Murat Hinojosa has expressed on Twitter that he plans to bring a regulatory proposal over cryptocurrencies before the national legislative branch.
According to coindesk, citizens in Mexico are getting restless and agitated over the increasing onerous banking regulations of the country. These regulations are constantly making difficulties in acquiring loans from the banks. The process of remittance is also suffering due to the stringent laws placed by banks and high transaction fees charged by the remittance services such as WesternUnion and PayPal. Cryptocurrencies can provide a more viable and cheap solution to the problem of the citizens of Mexico.
Voices were also raised from Brazil in the support of Bitcoin after El Salvador’s move. Politicians such as Fabio Ostermann, a State Deputy for Rio Grande do Sul of Brazil and another Federal Deputy of Brazil, Gilson Marques, made new laser eyes profile pictures to show their support towards bitcoin and cryptocurrencies in general.
Crypto is booming in Brazil, with crypto exchanges such as Mercado Bitcoin has witnessed an unprecedented amount of trading volumes and other crypto exchanges in Brazil are also seeing crypto adoption by the users at an increasing rate.
A Member of the parliament of Tonga Lord Fusitu’a during an interview expressed his intention to push the notion of accepting bitcoin as legal tender in the parliament of the dominion of Tonga as shortly as attainable. He also claimed that he is in talks over an investment project with Jack Mallers, founder and CEO of Strike, a payment app. In this investment project, Fusitu’a claimed that $750 million from the country’s reserve would be used to buy bitcoin.
Fusitu’a attributes this decision to the feeble economy of the nation and lamented about the high interest rates, lack of credit facility, poverty struck citizens and claimed the nation is on the mercy of the central banks of the north of the planet. Almost 38% of the GDP of Tonga is contributed by remittances by migrants (income sent from foreign countries) and the currency of Tonga is pegged to a basket of currencies like New Zealand Dollar, Australian Dollar, US Dollar, and Japanese Yen. This takes away their power to control monetary policy and leaves them at the disposition of the central banks of these nations.
In March, Brazil also became the second country in American Continent after Canada to approve a Bitcoin ETF (Exchange-Traded Fund). Despite the growing use of Cryptocurrencies in Brazil, they are lagging in providing a regulatory framework to cryptocurrencies. With the recent move of El Salvador, Brazilian lawmakers are also seeming eager to make laws and regulations in this respect.
Tanzania also joined the list of the above nations which are gearing towards crypto adoption. Tanzania’s president Samia Suluhu Hassan urged the country’s central bank to begin exploring bitcoin and other crypto assets. She stated that we are witnessing the advent of new internet technology and our nation should be ready for necessary changes and should not be caught unprepared.
African nations are still behind the race to legalize and adopt bitcoin as they still lack the laws and regulations to govern cryptocurrencies. But, Africa as a continent comes second after North America in peer-to-peer (p2p) bitcoin trading transactions. This shows that the people in the African continent are highly embracing bitcoin and cryptocurrencies. With a little support and clarification of laws from the government on cryptocurrencies, the African continent has the potential to lead the world in the journey of adoption of Bitcoin and other cryptocurrencies.
All the countries above come under developing nation status. This shows that developing countries can be the catalyst in this movement of mass adoption of bitcoin and cryptocurrencies.
This is because bitcoin and other cryptocurrencies provide use cases that will prove to be most beneficial for developing and underdeveloped economies. And these countries are beginning to understand this point and are now acting on it.
El Salvador has started a spark and it’ll soon turn to fire as more and more countries decide to follow its path. It feels like, just yesterday the whole world was apprehensive of bitcoin, and governments all around the world had either banned bitcoin or were thinking of banning it.
Indeed, there remain many obstacles in the path of mass adoption of bitcoin which indicates that this is going to be a bumpy ride. But bitcoin has already covered a considerable distance journey and the finishing point doesn’t seem far now.
Do you think more countries will make bitcoin legal tender like El Salvador? Let me know in the comments section below.