What Country Will Be the First to Follow El Salvador and Embrace Bitcoin?

Ukraine

It might come as a surprise that Ukraine is actually one of the most likely nations to embrace crypto but prior to the Russian invasion government officials were actually taking steps to make crypto more accessible.

Ukraine parliament Verkhovna Rada passed legislation legalizing crypto and other virtual assets. Draft law No. 3637 introduced a regulatory framework and legal base for cryptocurrencies. 276 lawmakers approved the bill.

Reports from as early as 2019 indicated Kyiv was mulling the move. London-based publication CITY.A.M reported President Volodymyr’s delegates held a sitting with neighboring El Salvador counterparts to discuss a possible pathway for cryptocurrency adoption in the Eastern Europe country.

CITY.A.M also said Volodymyr had directed ministers to start working on making Ukraine a crypto-friendly nation. It’s not far-fetched to imagine Ukraine could consider adopting Bitcoin legal tender in the future. The country has set eyes on becoming a Bitcoin destination of sorts.

CITY.A.M also reports Zelensky visited crypto experts in Silicon Valley to explore a path through which Ukraine can become a dual-currency country. The idea would be for the native currency — the hryvnia, to exist alongside Bitcoin.

More recently the country has accepted millions in crypto donations to assist in the conflict with Russia. Its clear that people in Ukraine understand the value of crypto.

Panama

There’s sentiment in the cryptoverse that Central American country Panama might soon jump on the Bitcoin-as-legal-tender bandwagon. Two prominent figures in the space have boldly made this prediction. This January, El Salvadoran president Nayib Bukele tweeted that “2 more countries will adopt (Bitcoin) as legal tender.”

Bukele’s forecast was propped up by financial advisory group deVere CEO Nigel Green. Investment Week reports that Green expects three more countries to follow El Salvador’s lead. “I’m confident that… Nayib Bukele is correct about other countries adopting Bitcoin as legal tender in 2022.”

Only that Green believes three more, not two countries, will take the plunge.

He also imagines low-income countries will be at the forefront of this adoption, considering their often weak national currencies that are susceptible to market swings and inflation. These countries have switched to the US dollar — which puts them at a disadvantage, including being vulnerable to foreign influence.

Green contends that if such countries take on Bitcoin, they can have a currency not subject to market conditions. They also get to be able to directly control their own economy.

Panama, a country regarded as a high-income one by the World Bank, has never held a stance on crypto. But the day after El Salvador’s move, Panama unveiled a bill dubbed “Crypto Law: Making Panama compatible with the digital economy, blockchain, crypto assets, and the internet.”

If ratified, the bill will be the first step in the long road to making Bitcoin legal tender in the country.

Tonga

Tonga is a strong contender in countries that might take on Bitcoin as legal tender. The Polynesian country is gearing up to adopt Bitcoin at the highest level of the Kingdom, per former member of parliament Lord Fusitu’a.

Fusitu’a detailed on Twitter a five-point strategy on how the Pacific Island nation intends to implement Bitcoin legal tender — by at least December 2022. While answering a Twitter users’ question, Fusitu’a revealed Tonga’s legal tender bill would be “modeled on and almost identical” to El Salvador’s.

Speculation was rife in 2021 that the country might make the move, but it reached fever pitch after Bitcoin podcaster Peter McComark sat down with Fusitu’a. In the discussion, Fusitu’a foresaw Bitcoin users “having a disposable income of 30%,” with some “saving it rather than putting it into the economy and stacking sats.”

Tonga is classified as a developing country, and it uses the non-convertible currency called the pa’anga. It significantly depends on remittances — more than any country in the world. Remittances were one of the driving forces for El Salvador’s adoption of Bitcoin. It seems as though Tonga is taking a page from El Salvador’s playbook by taking up Bitcoin to address the issue of relying on remittances.

Paraguay

Paraguay is another country that’s shown signs of wanting to follow in the footsteps of El Salvador. To be clear, the government has not made a move to make Bitcoin legal tender. A quick look through the web shows that if Paraguay adopts Bitcoin in that manner, it will almost have been willed into it by the Bitcoin community.

Last year, several media outlets had reported Paraguay was already on its way to legally adopting Bitcoin. They might have gotten the cue from Paraguayan congressman Carlos Rejala, the self-appointed hype man for Paraguay’s adoption of Bitcoin. And while he’s at the forefront agitating for its implementation, he’s also clarified that it would be politically “impossible.”

But in December, the Paraguayan Senate passed a bill regulating the mining and trading of cryptocurrencies. The bill awaits deliberation in the Chamber of Deputies this year. If the bill passes, it could be a step closer to the legal adoption of Bitcoin in the country.

Bitcoin fans are convinced Paraguay is likely the next domino to fall in taking up Bitcoin. One argument for this is geography. Fans believe that Southern America is the present-day frontier for Bitcoin adoption, with El Salvador having already ticked one box.