Bitcoin has made great strides in adoption lately as more and more people and even countries have started adopting it. El Salvador is the prominent and undoubtedly pioneer country to adopt bitcoin as legal tender in 2021, with mixed effects.
As the cryptocurrency market is characterized by high volatility, the government of El Salvador, for example, is looking for a solution to this unpredictability. It has issued a call for proposals from companies that can submit a financial contract to the government to keep the bitcoin value constant for salary and pension payments.
A Swiss company has offered the government a futures contract that commits to buying the country’s bitcoin supply at $50,000 per unit, regardless of the current market price. However, this incident has raised questions about whether other governments will follow suit and accept bitcoin.
Countries Adopting Bitcoin As A Legal Tender
Other countries are already studying El Salvador’s historic decision, and if they believe it’s feasible, bitcoin could be on its way to global recognition. Here are four other countries to watch as they seem to be among the countries most likely to follow El Salvador.
Boasting an economy size of US $3 trillion, the Indian legislation recently passed a motion in the parliament to introduce the crypto tax. While taxes are hefty-30%, there is a consensus about the legality of bitcoin developing amongst the millennials who drive the maximum crypto base in India. The status of bitcoin as a legal tender is still ambiguous as India would not draft cryptocurrency legislation until a global consensus has emerged on regulating such assets.
Panama borders El Salvador, so it’s not unexpected that it’s on the shortlist of countries considering bitcoin as a legal tender. And unlike several other countries that are believed to be considering doing so, the day after El Salvador, Panama wrote legislation to make bitcoin legal tender.
Cuba has not yet fully adopted cryptocurrency as a legal tender, but it is on the way. Cryptocurrencies are now officially recognized and regulated, allowing residents to use them freely. This decision was influenced by the United States’ tightening of rules on money transfers between Cuba and the United States, including the closure of all 400+ Cuban Western Union offices.
Carlitos Rajala, a member of Paraguay’s Chamber of Deputies, introduced a bill to legalize and regulate cryptocurrency shortly after El Salvador announced its bill to make bitcoin legal tender. Moreover, Carlitos Rajala is running for president in 2023, and part of his plan is to make bitcoin the country’s official currency.
Advantages of Bitcoin for these Countries
Bitcoin will benefit these countries in several ways.
- Since the sender of bitcoin does not pay a cent, recipients receive significantly more money, circulating into the economy.
- Moreover, this can lead to an increase in remittances from people residing outside.
- Additionally, bitcoin’s acceptance is believed to attract jobs and foreign investments.
- As institutional investment becomes a trend in bitcoin, it will create a robust ecosystem driven by decentralised finance that caters to everyone and everything.
Finally, emerging markets that want to compete globally can benefit from bitcoin. In addition, specific solutions, such as bitcoin ATMs, make it more convenient than ever before for users to use bitcoin. By making bitcoin legal tender, markets gain access to a currency unaffected by another country’s market or economy. There was no other way before. It now exists.