Over the years, we have seen the perception of Bitcoin change from a scam to a hedge against inflation to becoming a country’s legal tender. Yeah, you read that right. A legal tender!
El Salvador Bitcoin Law
On June 9, El Salvador became the first country to create a law to make Bitcoin legal tender. This means businesses can accept Bitcoin as a form of payment, and citizens can use Bitcoin to pay taxes and bills.
Most importantly, El Salvador is pushing blockchain and cryptocurrencies to take a big step in the right direction.
Cryptocurrency stands for the modernization of democracy and offers a level playing field for underserved people. El Salvador’s adoption of Bitcoin as legal tender brings hope to those who need it most, not just in El Salvador but across the globe.
By introducing Bitcoin as a legal currency, El Salvador actively believes that Bitcoin will sooner or later be accepted by other countries and become a medium of exchange for deflation and, above all, become a launching pad for El Salvador’s economic development.
However, El Salvador’s decision to accept Bitcoin as legal tender has received positive and negative feedback. The World Bank and the International Monetary Fund have expressed different views on the Bitcoin law. Despite the obstacles, El Salvador officially made Bitcoin legal tender on September 7.
How El Salvador Bitcoin Law Paves the Way for Crypto Adoption
By introducing Bitcoin as legal tender, El Salvador has opened up many opportunities in the cryptocurrency indu to the citizens of El Salvador.
In El Salvador, 70% of the population is unbanked. People without bank accounts face major challenges when it comes to saving and building wealth. They also have to work in the dark because they are excluded from the mainstream of the local economy, which often leads to exploitation. With the introduction of Bitcoin, they can gain access within the local economy and around the world.
Following the El Salvador announcement, many Latin American countries, including Argentina, Panama, Mexico, and Paraguay, expressed their interest in adopting cryptocurrencies.
Some countries have proposed the idea of making Bitcoin legal tender, while others have proposed laws regulating Bitcoin. Some people say this isn’t a bad thing due to the nature of Bitcoin as a currency that has nothing to do with any economy or coin.
A new law is currently in development to enable Panamanian citizens to use cryptocurrencies. According to Gabriel Silva, a congressman who supports cryptocurrency the new bill aims to make the country compatible with cryptocurrency, blockchain technology, and the internet.
Additionally, Silva believes that passing the bill will positively contribute to creating thousands of jobs, attracting foreign investment to Panama, and promoting the transparency of government activities.
The bill aims to encourage innovation and expand the country’s financial services beyond the current state. The document suggests that Panama recognizes Bitcoin as an alternative global payment method that can be used for commercial and civil businesses.
The bill hopes cryptocurrency will be seen as an alternative payment method as the asset class focuses on providing efficient, fast, and inexpensive cross-border settlements.
In Africa, the Central Bank of Nigeria (CBN) has announced that it will finally launch its own digital currency pilot program on October 1, 2021. The CBDC project called “GIANT” will run on the modular blockchain framework Hyperledger Fabric.
In a recent webinar, the Central Bank of Nigeria announced that it had set a precise date for the start of the CBDC pilot program – October 1. Rakiya Mohammed, Director of Information Technology at CBN, emphasized this initiative as the institute has researched and developed the project for four years.
With the help of this blockchain technology, Nigeria hopes to focus on solving increasingly serious regional problems such as monetary policy effectiveness, revenue tax collection, improved payment efficiency, remittance improvement, financial inclusion, and targeted social intervention. In addition, CBN indicated that e-naira would make cross-border trade easier.
Elsewhere in Ghana, Dr Mahamudu Bawumia, Vice President of Ghana, said that the introduction of cryptocurrency will benefit the African continent’s trading sector. He believes digitization is a tool to help the economy recover from the devastating effects of the COVID-19 pandemic.
At the Fifth International Trade and Finance Conference of Ghana in the capital, Accra, the country’s vice president, believed that African governments should use digital currencies to promote trade and strengthen other manufacturing sectors of their economies. Most importantly, they increase financial activity, create macroeconomic stability, and fuel growth.
He recalled that it is currently difficult for African countries to exchange goods because the exchange process is expensive, slow, and inefficient. The “Single Central Payment” platform with digital currency as its core will change this situation and build a stable financial network for the African continent.
As more countries continue to focus on crypto adoption and create their CBDC, we can expect to see a global adoption of blockchain and cryptocurrencies in the coming years. Gone are those days where blockchain and crypto sound strange to the ears. We are moving towards a crypto era in no time.