Tonga to copy El Salvador’s bill making Bitcoin legal tender says former MP
Tonga may aim to imitate El Salvador’s Bitcoin Law to make the said cryptocurrency legal according to a former lawmaker and Tonga citizen, Lord Fusitu’a. Fusitu’a also predicted that the country may start accepting Bitcoin as payment for transactions by November 2022. His statement brought about excitement not only from the people of Tonga but also from other countries that are already using Bitcoin.
Since the beginning of 2021, there have been numerous speculations that Tonga will be the next country to adopt Bitcoin. This occurred since Tonga has a similar economic situation as El Salvador. These rumors were further amplified when Lord Fusitu’a appeared on a podcast hosted by Peter McCormack, a familiar name in the Bitcoin industry.
The Insight of Lord Fusitu’a about Bitcoin in Tonga
Last Wednesday, January 12th, Lord Fusitu’a posted a series of tweets regarding a five-point plan on how Bitcoin can be legalized in Tonga. He also noted that this plan was modeled around the process it took to pass the Bitcoin Law in El Salvador. He even enthusiastically engaged in the replies section and answered the inquiries of Tongans.
Although his tweets had met some criticism like questions on the internet access of the country, he answered that Tonga is ready for Bitcoin transactions. That is because according to him, the country now has over 90% internet access. This was a huge leap from what was reported to the World Bank back in 2017 which was only 50%. With this taken into account, Fusitu’a is optimistic that by November 2022, businesses in Tonga will be accepting Bitcoin as payment.
El Salvador’s Bill and Tonga
Last September 7th, 2021, El Salvador passed the Bitcoin Law allowing the cryptocurrency to be a legal tender in the country. It was not widely accepted at first, due to fear of the high volatility of the digital coin. Citizens voiced that this can affect their investments in the long run and also their retirement funds.
Since the said law is relatively new, it may take a while for the citizens of El Salvador to reap the benefits of Bitcoin. Despite the backlash, Fusitu’a thinks that if Tonga adopts this law, this will benefit the country a lot.
What Bitcoin means to Tonga
One of the reasons why Fusitu’a and those who support his idea believed the importance of the Bitcoin Law is because of the economic similarities of Tonga and El Salvador. In particular, both Tonga and El Salvador depend largely on remittances. Tonga has over 125,000 of its citizens scattered in countries like Australia, the United States, and New Zealand. Fusitu’a believed that if Bitcoin became a legal tender in Tonga, this will create a circular economy based on the said cryptocurrency.
Moreover, Fusitu’a hopes this will increase remittances in the country. According to the World Bank, 39% is the current percentage of remittances on the country’s gross domestic product. Bitcoin may be what this small island kingdom on the southwest part of the Pacific Ocean needs to boost its economy.
* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.