Bitcoins remain the most popular and valuable cryptocurrency. One of the major reasons for its growth is the use for performing international transactions. Despite the massive bitcoin adoption, it is not yet accepted as a legal tender in most countries. However, El Salvador has made bitcoin a legal tender.
This news has nearly instantly boosted the Bitcoin price by about 5% and despite the current slow growth of Bitcoin, many crypto prediction sites forecast for BTC to yet reach the 100k USD milestone by the end of the year. In order for this to become reality, more countries recognizing Bitcoin as legal tender would help. And because there is a good chance of that happening, we will take a look in this article at countries that might decide to do so.
What is a Legal Tender?
Before we delve into countries planning to legalize bitcoin for official use, let’s understand what legal tender means. Legal tender is a monetary instrument used to settle debt and meet fiscal responsibility such as paying taxes.
El Salvador – the Pioneer
On 9th June 2021, El Salvador signed a law making bitcoin a legal tender. Thus, it becomes the first country to use the digital token as a legal tender. Initially, the president of El Salvador, Nayib Bukele, had announced plans to make the virtual currency a legal tender during the Bitcoin 2021 conference in Miami.
Soon after, the country parliament passed the bill swiftly. The bill passed with 62 votes against 84 in congress. As a result, Bitcoin will become a legal tender from September 7th alongside the US dollar.
According to President Bukele, 70% of the Salvador population does not have access to conventional banking systems. The tech enthusiast President said using bitcoin could help Salvadorans send remittances home amounting to $6 billion. In fact, the country has promised to award citizens $30 bitcoin when they download and register with Chievo (El Salvador crypto-wallet), as reported by Forbes.
While several other countries have mooted the plans to include bitcoin in their mainstream financial system, only El Salvador has made the bold step. Nevertheless, the move is likely to be replicated in other countries. What’s more, this move gives confidence to investors about the future of bitcoin.
The Next Countries in Line
As mentioned, several countries have plans to make bitcoin legally acceptable for debt payment. Coincidentally, most of its countries are in Latin America. Below are countries planning to make bitcoin a legal tender.
Bitcoin adoption is one of the high-priority agendas for the landlocked country. To achieve this goal and match the financial might of its wealthy neighbors, Paraguay is set to enact regulations that will attract bitcoin companies to the country. In fact, the parliament is set to vote on bitcoin as a legal tender. Once the bill sails through, the second bill in October will have bitcoin recognized as a legal tender.
Politicians have come to the forefront to respond to the El Salvando move. Congressman Rejala said Paraguay should move in tandem with the new generations. The congressman said, “This week, we start with an important project to innovate Paraguay in front of the world.” He also tweeted, “July we legislate! #Bitcoin. However, the congressman later rectified the statement. He told Reuters he would introduce bitcoin regulations bills in parliament on July 14.
Venezuela has massive reserves of oil and precious metals. On paper, it should be among the wealthiest countries in the world was it not for the blatant mismanagement of public resources. In 2018, Venezuela attracted global attention when it launched its own cryptocurrency petro or Petromoneda. However, the cryptocurrency didn’t live up to expectations, as predicted by experts.
Using crypto is meant to deal with the dire situation of Venezuela’s fiat currency. As per Forbes, Venezuela’s inflation hit 80,0000% in 2018. Al Jazeera reports that cryptocurrencies are currently used to hedge inflation in the country. Since there is will and infrastructure, the country could adopt bitcoin as a legal tender with little government intervention.
Panama is popular for its beautiful sceneries. It is also a great financial hub thanks to its perfect geographical location, linking the south and Central America. In addition, the Panama canal plays a vital role in the shipping industry on the world stage.
When El Salvador accepted bitcoin as a legal tender, political parties and leaders in the country called on the government to follow suit. For instance, congressman Gabriel Silva demanded that the country move to speed and follow El Salvador’s steps. In a tweet, he urged the country to support cryptocurrencies to become a technological and entrepreneurship hub. Silva is expected to present the crypto-related bill in the assembly. The bill is expected to provide incentives for businesses dealing with cryptocurrencies.
Silva said he believes the legislation could be achieved, although it might take slightly longer than it did in El Salvador. Silva party, Bancada Independiente, is in opposition. This is a different situation from El Salvador, where the ruling party sponsored the bill. The bill requires 36 out of 71 votes to pass.
El Salvador’s moves to make Bitcoin a legal tender sparked a discussion in Nicaragua. In fact, some politicians have already voiced their opinions on the same issue.
Here is another interesting point. El Salvador’s decision to make bitcoin a legal tender could pose competition for the US dollar. This could lead to US sanctions on the country. Given the historical ties between Nicaragua and El Salvador, a move by the US to sanction El Salvador could be enough boost for Nicaragua to make bitcoin its legal tender.
Brazil’s economy is among the fastest-growing in the world. The country is also vaunted for its great innovations. In regards to cryptocurrencies, the country has held numerous bitcoin and cryptocurrency summits. In addition, most of its leaders are young and well versed with technology. Brazil plans to unveil a national cryptocurrency becoming a part of South America’s bitcoin alliance. State deputies Fabio Ostermann and Gilson Marques put laser eye profile pictures on Twitter, showing support for bitcoin. A bill to make bitcoin a legal tender could be presented to the parliament in the coming months.
Bitcoin has dominated discussion in the Argentina government and its almost 50 million citizens. Additionally, the new generation is interested in cryptocurrency adoption, albeit with resistance from the old guards. Francisco Sánchez, a Nationa Deputy in Argentina, also added laser eyes on Twitter profile picture before adding a tweet, “I can’t believe it, but this is how it is.” However, plans are underway to have the bill proposing to make bitcoin a legal tender in Argentina before the end of the year. How that plays out is a wait-and-see situation.
While most counties planning to make bitcoin a legal tender is located in south and central America, Malta is the odd one out. The government and its people’s interest in new tech have made the country a hub for blockchain and cryptocurrencies in Europe. In addition, the tax breaks and other benefits for tech industries have attracted tech companies.
Malta has in the past made its discomfort with the Euro well known. Also, the country supported the UK’s exit from the EU (Brexit). Malta is one of the countries to watch outside Latin America. There are initiatives to bring the bitcoin conversation to the forefront in the next 12 months.
Bitcoin adoption is now moving mainstream. However, some countries have taken bitcoin use to a whole new level by making it a legal tender. First in line is El Salvador. This bold move is expected to spill over to other Latin American countries. In the future, we could see other countries from all corners of the world start using Bitcoin as a legal tender. That said, we can conclude the future of Bitcoin is bright.