Bitcoin Legal Tender in El Salvador
Expert sees bitcoin as legal tender in at least five countries by the end of 2022
Countries like Ukraine, Panama and Brazil are working on crypto laws
El Salvador was the first country to hold bitcoin in early September legal tender. This means that every merchant in the country that is technically capable of doing so is obliged to accept payments in cryptocurrency. Taxes can now be paid in bitcoin in El Salvador as well.
For the Central American country, this means great progress, as transfers can now be made quickly and cheaply. Many El Salvadorans work overseas and regularly send money home to their families. However, since many people in El Salvador do not have access to banking services – for example an account or a Credit Card – Until now, they have relied on providers such as Western Union, which, however, charge higher fees. These can now be largely saved when using bitcoins. Another statistic suggests these are not small sums at all: According to BitMEX CEO Alexander Heptner in a blog entry, about 23 percent of El Salvador’s GDP last year came from abroad. The situation is similar in many other developing countries as well. That’s why Hptner believes that by the end of 2022 many more countries will follow El Salvador’s example.
Experts: Other developing countries will follow El Salvador
“I anticipate that by the end of the coming year at least five countries will accept bitcoin as legal tender. Each of them will be a developing country,” writes Heptner in his blog entry on bitcoin trading platform BitMEX. The BitMEX boss did not specify which countries he thinks it would be. However, he points out that many developing countries such as El Salvador are affected by major problems with respect to cross-border payments and that there is often heavy inflation in the local currency. In addition, these countries will have decades to analyze “how the global financial system works – and above all, does not work for its people. They are concerned about their powerlessness to influence monetary policy decisions.” which can have dire consequences for their citizens”, Haptner says. Bitcoin provides a way here.
Michael Sonnenshein, head of digital asset manager Grayscale, sees it in a similar way. “Adaption to cryptocurrency is highest in emerging countries, that is, parts of Africa, Southeast Asia and South America. There, with many citizens not having access to financial services, the local currency has been devalued because the state has There is very little control over the local currency” he said emphatically for “cash”. Therefore, he also hopes that other emerging countries will be able to discover bitcoin for themselves.
Paying With Bitcoin – These Countries Have Related Vorste
There are already political advocates in the direction of crypto legislation in some countries. However, many countries want to create regulatory clarity first. However, evidence suggests that this will only be the first step on the way to accepting cryptocurrencies as legal tender.
Among other things, Ukraine is working on a law on cryptocurrencies that will govern crypto activities.
Today the Verkhovna Rada of Ukraine (Parliament) adopted a draft law “On Virtual Assets” to regulate operations with crypto.
Regulatory clarity for crypto is undoubtedly brisk for the space. Thanks Ukraine! I https://t.co/XB9pCR0CZn
— CZ Binance (@cz_binance) September 8, 2021
According to the “Cash” report, Ukrainian President Volodymyr Zelensky is planning to turn his country into a crypto mecca and is also trying to lure crypto companies into the country. The government’s crypto-friendly stance is therefore a good starting point for allowing bitcoin and the company as legal tender in the future.
Brazil is also known to be quite crypto-friendly. According to a survey available for “Blockchain World,” 48 percent of Brazilians are of the opinion that their country should follow the example of El Salvador when it comes to bitcoin adaptation. Brazilian MP Aureo Ribeiro seems to support this stance. According to “BTC Echo” he said in a recent radio interview that governments are working on rules for the use of cryptocurrencies in everyday life. “We want to separate the wheat from the straw, we want to make rules so you can trade, so that you know what you’re buying, so that you know what you’re dealing with, and so that you have May this luck be for one buy a house or a car to go to McDonald’s and get a hamburger and it will be the currency in this country as it is in other countries,” Ribeiro said. According to “BTC Echo,” however, the Brazilian government is initially working on a regulatory framework for bitcoin and other cybercurrencies. Like in El Salvador, there is no indication of a plan to actually establish cryptocurrencies as legal tender – even though Orio Ribeiro’s comments suggest that this may eventually be the plan.
According to “Cache”, plans have already gone ahead in Panama. According to the news magazine, legal initiatives are being taken to upgrade the two cryptocurrencies bitcoin and ethereum. Congressman Gabriel Silva announced on Twitter that Panama is striving to become a country that is “compatible with blockchain, crypto assets and the Internet” through a new crypto law. According to “cash”, however, cryptocurrencies should not yet become legal tender, but should be initially recognized only as an alternative payment method. Unlike in El Salvador, companies will not be obliged to accept them.
The first country that can really follow the example of El Salvador may be the island nation of Tonga. According to “Invez”, MP Lord Fusitu is already working on a bill to make bitcoin legal tender. Here too, the focus is on reducing transfer costs, as transfers from abroad account for about 40 percent of Tonga’s GDP. According to “Invez”, Lord Fusitu also drew a direct comparison to El Salvador, saying that the situation in the island state of Tonga was not much different from previous problems in El Salvador.
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Wild speculation about the acceptance of bitcoin
Apart from these countries, where there are solid signs of possible future acceptance of bitcoin as legal tender, there is also wild speculation on the internet as to which countries El Salvador may follow in terms of bitcoin acceptance. For example, “CoinMarketCap” provides a list where users can vote which country they consider to be the next legal tender for cryptocurrencies. The first two places are Paraguay and Venezuela, followed by Anguilla, Panama and India at a distance. But only developing countries are not on the list. A lot of users are apparently speculating that bitcoin will soon become legal tender in the United States, as the country ranks sixth. Germany is also represented – ranked 25th out of a total of 245 countries. Switzerland is ranked 31st, with Austria only 95th. However, as I said, this list is just wild speculation. To what extent these will apply is doubtful.
Finanzen.net Editorial Team
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