We’ve talked about El Salvador, Panama, Venezuela, and Central African Republic. But which other countries are considering adopting Bitcoin as their official currency? Let’s take a look at the situation in El Salvador to get an idea of where Bitcoin might go next. El Salvador is not the only country considering adoption, as it is also studying Venezuela and Venezuelan government policy. El Salvador has the potential to be the first domino to fall, but other countries are studying this issue closely.
El Salvador
In the past few months, the government of El Salvador has made a bold move to recognize Bitcoin as the official currency of the country. The country’s government has spearheaded development of new Bitcoin technology, including a digital wallet known as Chivo, which means “goat” in Spanish and is Salvadoran slang for “cool.” The Chivo Wallet allows users to receive and send cryptocurrency funds like PayPal and Venmo. While the government has not provided details about the corporation behind the program, the Rest of the World has interviewed private firms involved in the rollout. The most prominent role goes to a U.S.-based cryptocurrency company.
The rollout of El Salvador’s Bitcoin experiment has been bumpy, however. The day Bitcoin became legal tender, the price of the Bitcoin fell by about 10% against the U.S. dollar. Since then, the price has continued to fall. El Salvador’s government is buying more coins, totaling around $22 million. The country’s move to accept Bitcoin has also sparked concerns among members of the Bitcoin community.
President Nayib Bukele says that the move will facilitate the transition of many Salvadorans into the formal economy. As of January, more than a quarter of Salvadorans do not have a bank account, so elevating Bitcoin to the status of legal tender will allow them to receive funds from abroad much more easily and cheaply. This will also create opportunities for businesses to accept Bitcoin alongside the U.S. dollar, which has been the official currency in the country since 2001.
The government of El Salvador has announced that Bitcoin will become the official currency of the country on June 7, 2021. The move has been greeted by some controversy, however the government’s intention was well-intentioned and the country’s people are now using the cryptocurrency. It is not easy to use, but the government is committed to making it legal. If this move goes through, El Salvador may become the first country to recognize Bitcoin as a legitimate currency.
Venezuela
Many people in Venezuela are beginning to see the benefits of Bitcoin as an official currency. There is no need for physical bank accounts, and all you need is a smartphone and Internet connection to use Bitcoin. In fact, many Venezuelans already own smartphones and can send and receive Bitcoin through their phones. With the increasing value of Bitcoin, it may actually be a better option for Venezuelans to use this new currency. But what will the effects be on the local currency?
In addition to the advantages of cryptocurrencies, many developing countries are also exploring new ways to address problems with their national currency. Venezuela has the highest inflation rate in the world, due in part to the steep decline in the price of oil. It is estimated that the country will experience inflation as high as 1,600 percent. The value of a 100 bolivar note is now worth just two cents. Although Venezuela has plans to issue higher-denomination notes, these measures will not solve the country’s poverty crisis.
With the help of cryptocurrency, merchants in Venezuela have begun accepting BTC. In a recent partnership between Cryptobuyer, a Panamanian cryptocurrency exchange, and Mega Soft, a Venezuelan payment processor, BTC can now be accepted at 20,000 point-of-sale (POS) terminals. Other Venezuelans have turned to custodial solutions like AirTM to make it easier to use Bitcoin within a network. The new currency has already helped Venezuelan freelancers and international travelers pay for their goods.
While Jimenez’s team has had controversial dealings with the Maduro government, it seems that they are committed to fighting the inflation crisis in Venezuela. But their efforts are not going unrewarded. The government has recently issued a million-bolivar note, worth half a US dollar. This is a huge step forward for Venezuelans and the cryptocommunity. However, it is still a long way off.
Panama
A new bill in Panama has made cryptocurrencies legal tender. The bill does not make Bitcoin official currency, but it recognizes several other cryptocurrencies as acceptable forms of payment. While the value of cryptocurrencies varies, Bitcoin is currently worth $38,870, while XDC Network is worth only $0.057. Under the new law, businesses can tokenize precious metals and other goods. The Central African Republic and El Salvador have both approved the use of Bitcoin as official currency. The law will not make Bitcoin legal tender in Panama, but it will certainly promote the use of other cryptocurrencies, especially Bitcoin.
El Salvador made bitcoin legal tender earlier this month, and while it has been met with controversy, Panama’s new law does not allow for any of that complication. While the El Salvador Bitcoin law requires that economic agents accept BTC payments, the Panamanian law merely recognizes digital currencies as alternative payment methods. Ultimately, it will be up to individual businesses and governments to decide whether or not they wish to adopt Bitcoin as an official currency.
The law’s proponents say that it would promote banking interoperability and greater inclusion. According to Gabi Silva, a member of the Panamanian Assembly, the new law is an important step in making the country compatible with the digital economy, blockchain, and other crypto assets. The new law is a positive step in the right direction, but it will take years for traditional institutions to adapt to the new reality.
In a move that could potentially lead to a global adoption, El Salvador is among the first country to recognize Bitcoin as legal tender. While other countries are considering the same move, the US and UK have expressed interest in creating their own cryptocurrencies. In El Salvador, the president hopes that the use of the digital currency can help the country solve its economic problems. It is estimated that about five percent of the country’s GDP is based on citizens sending money home from abroad, and the costs of transaction are extremely high. In Panama, seventy per cent of the population does not have access to a bank account. Using the cryptocurrency as a means of payment could result in much cheaper transactions and remittances.
Central African Republic
The Central African Republic (CAR) has become the second country in the world to make Bitcoin an official currency. El Salvador did so last year, and now the CAR has done the same. A bill passed by Central African Republic lawmakers this week makes bitcoin an official legal tender. President Faustin-Archange Toudera signed the bill into law, enabling the country to legally accept Bitcoin and other cryptocurrencies.
The Central African Republic is the poorest country on earth, and one of the least stable. The country has been plagued by conflict for nine years. Although the government controls the capital, armed groups control the rest of the country. The new law has caused widespread protest among many government officials. The CRS (Citizens Standing in Solidarity with the Central African Republic) organization has taken this issue to court and successfully sued the government to stop the country from accepting Bitcoin.
The CAR government is not the first country to approve Bitcoin as an official currency. Despite widespread opposition from citizens, Bitcoin supporters believe the move could pave the way for a wider adoption of cryptocurrency in the country. Despite the opposition, the new law is being welcomed by many cryptocurrency enthusiasts. Although the new Central African Republic law was approved without prior BEAC guidance, two former prime ministers signed a letter of disapproval.
However, critics of the CAR’s decision to make Bitcoin an official currency have warned that this move will work directly into the hands of the Russian warlords. Some have claimed that adopting bitcoin without BEAC guidance is a serious offence. The CAR has gold and diamond reserves, but despite these, it remains one of the poorest countries in the world. Years of political and economic conflict have devastated the economy and damaged relations with international partners. As a result, some partners have suspended budget support.
Venezuelan Congressman Gabriel Silva’s bill to provide legal certainty for crypto assets in Panama
In a recent article, a Venezuelan Congressman called for Panama to adopt cryptocurrency legislation to avoid being left behind by other countries. But the question is: will the country’s government go all the way? Will it allow cryptoassets to be used as legal tender? Or will it allow only companies and governments to use them? The proposed bill is far more extensive than El Salvador’s bill that made bitcoin legal tender last year.
The bill passed the Panamanian Assembly, and now goes to the country’s president, Laurentino Cortizo. In fact, this law could help the unbanked in Panama, where internet penetration is at nearly 90%. However, only one in four people has a bank account, making this legislation an excellent opportunity for the country’s unbanked. And while crypto assets are already legal in El Salvador, Panama is a Central American nation that uses the USD currency.
The Venezuelan Congressman Gabriel Silva’s proposal to introduce crypto asset legislation in Panama is encouraging, but a lack of transparency in the process is problematic. The bill’s official website does not mention Bitcoin in the introduction video, and the lawmaker’s Twitter account depicts red laser beam eyes. However, this is no reason to reject this proposal. It’s a chance for the government to gain public input and possibly even make crypto assets legal tender.
According to the official website of the bill’s author, the proposed law will create a stable environment for the crypto-assets industry in Panama. Moreover, the law’s aim is to adopt blockchain technology, which will improve government procedures. The law also proposes a blockchain-based identification system, which would help transform the state’s role as a provider of identity services.
