Though crypto is becoming more widely used in countries all around the world, there aren’t many places that have adopted it as a national tender. Most countries still used traditional currencies, like the dollar, the rupee, or the pound, but this isn’t the case everywhere.
A number of nations have or will soon adopt some form of cryptocurrency as a national, legal tender. So, which countries are taking on such a huge economic venture?
1. El Salvador
El Salvador is one of many countries that frequently use cryptocurrencies. In 2021, it became the first-ever country to accept Bitcoin as a national currency, and this was done for a number of reasons.
Firstly, a huge number of El Salvadorians receive remittances from friends or relatives living abroad. This money often contributes towards the household income of the recipient. Many El Salvadorians tend to travel abroad to find work and support their family, so remittances make up for a considerable portion of the country’s economy.
However, receiving remittances from abroad isn’t all smooth sailing. Recipients might have to pay high transaction fees to receive these funds, which can become strenuous.
This is where crypto can come to the rescue. Crypto exchange fees are often lower, and transactions can be processed in less time. So, by using Bitcoin, El Salvadorians can receive remittances for less of a fee and without a lengthy wait.
On top of the problematic transaction fees, over 70% of El Salvador’s residents do not have a bank account (according to Statista)—which makes receiving remittances more of a challenge. Since cryptocurrency transactions do not require a traditional bank account, people don’t need to have one open to gain access to their funds from abroad.
Now, El Salvadorians can shop, pay their bills and taxes, and get paid in the form of Bitcoin. Time will tell whether this huge venture pays off.
2. Lugano (Switzerland)
While the country of Switzerland itself has not yet accepted cryptocurrency as legal tender, the Italian-speaking southern city of Lugano has very different plans.
In March 2021, it was announced by Lugano’s city director, Pietro Poretti, its mayor, Michele Foletti—along with Tether’s CTO, Paolo Ardoino, that Bitcoin and the stablecoin Tether will soon be adopted as Lugano’s “de-facto” legal tender. The “de-facto” element of this announcement is very important, as it means the city will be adopting Bitcoin regardless of whether Switzerland’s national government accepts it or not.
It is thought that this move to crypto is part of Lugano’s goal to become the crypto and blockchain capital of Europe, which is certainly a challenging venture. This economic shift, known as “Lugano’s Plan B”, will allow Lugano’s residents to pay for services and pay their taxes in the form of Bitcoin, Tether, and the lesser-known LVGA token.
Bitcoin is arguably the most beginner-friendly cryptocurrency, and the Central American nation of Panama has been making clear moves towards taking on Bitcoin as a national currency. In fact, the country drafted legislation to make BTC legal tender just one day after El Salvador officially adopted the cryptocurrency.
Unlike the other countries on this list, one of Panama’s national currencies is the US dollar, alongside their core currency, the balboa. But these two may be outshone by a digital currency in the near future.
In September 2021, Panamanian Congressman Gabriel Silva released a bill intended to provide “legal, regulatory, and fiscal certainty to the use, holding and issuance of digital value and crypto assets in the Republic of Panama”—as reported by The Independent. Silva is known to be enthusiastic about cryptocurrency, and has made multiple tweets regarding the bill and stated that it will hopefully “create jobs, attract investment and bring transparency” within Panama.
With the introduction of this bill, we may soon see the total adoption of Bitcoin and other cryptocurrencies by Panama.
In February 2018, Venezuela launched its own form of cryptocurrency: Petro (or PTR).
Petro is supposed to be backed by Venezuela’s gas, oil and mineral reserves, and contributed billions of barrels of oil to which the Petro’s value can be pegged (though some do not think the coin is really backed by reserves). The Petro has now been adopted as a national currency alongside the country’s traditional currency, the Bolíviar.
Before the introduction of Petro, Venezuela’s economy was suffering from US and EU sanctions and debt, and the country’s hyperinflation problem was becoming severe.
A big change needed to be made to help the economy recover. This is where the Petro was proposed and later adopted, to tackle hyperinflation and tackle the consistent decline in value of the bolÍvar. The country also announced the launch of Petro Gold in 2018, a cryptocurrency backed by their gold reserves (though it is not known whether literal gold is backing the crypto).
Will the US Ever Accept Crypto As Legal Tender?
While you can pay for some goods and services using cryptocurrency in the US, cryptocurrency has been accepted as legal tender. But this may change at some point in the near future. At the moment, the country’s Federal Reserve claims to be in the “discovery phase” of developing its own digital currency—as mentioned by the Motley Fool in February 2022.
Though the Federal Reserve has not yet released a lot of information about the venture, it has been stated that they are focusing on a “safe and efficient payment system” for American residents—as reported by CNBC.
Crypto Could Become Legal Tender in Many Parts of the World
While there are only a handful of countries and cities that have adopted crypto as legal tender so far, it’s certainly looking like more and more are making plans to do the same in the near future. So, you may see your own country of residence introduce some form of cryptocurrency in the coming years!
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