The decision by the Central American nation El Salvador to adopt Bitcoin as legal tender earlier this week has been hailed by some crypto advocates as a milestone in the acceptance of the digital currency as a mainstream form of payment, while critics have derided the move as little more than a publicity stunt by the country’s president Nayib Bukele.
However, El Salvador’s decision has left many wondering if other countries will follow suit in adopting Bitcoin as legal tender, with some nations having already hinted that they too could open the doors to crypto and run against the cautious approach taken by many of the world’s central banks.
The South American nation is seen by some as the next candidate for Bitcoin adoption following reports that one of its congressman, Carlos Rejala, plans to introduce a bill next month to make Paraguay more attractive to the crypto industry.
Rejala’s plans will allow crypto firms to finance their operations in Paraguay using digital currency, as well as remit dividends abroad and capitalise any crypto profits into local banks. He has also touted Paraguay’s low electricity costs and the fact it sources almost all of its power from renewable sources, a key advantage amid concerns about the environmental impact of crypto mining.
If the proposed bill is approved, the congressman has also said he will look to present another bill making Bitcoin legal tender later this year.
Mexico and Panama
Back in Central America, both Mexico and Panama are considered potential Bitcoin adopters, with the latter likely to make waves globally if it follows El Salvador’s lead due to its status as a critical shipping lane.
The adoption of Bitcoin has attracted support from several Panamanian politicians, with some expecting a Bitcoin-friendly proposal to appear before the country’s lawmakers before the end of the summer.
Meanwhile, Mexico has previously seen discussions regarding the adoption of some form of digital currency, however, El Salvador’s move may have shifted favour towards Bitcoin rather than an alternative crypto or a Central Bank Digital Currency (CBDC).
Reformism and economic progress are also currently in vogue among Mexican politicians, with a bill to legalise recreational cannabis currently making its way through the legislature.
While the country unveiled its own cryptocurrency, the Petro, back in 2018, efforts by Venezuela to get its digital currency off the ground appear to have fallen flat thus far, partly due to ongoing US sanctions against the country.
However, the volatile and oil-rich country may decide to remedy this by adopting Bitcoin, which is already widely accepted with a relatively stable and proven blockchain payments network.
Adopting Bitcoin may also appeal to the government in Caracas given the dismal state of the nation’s fiat currency despite its vast reserves of oil and gold.
Others that could follow
Aside from the countries mentioned above, other countries have also signalled a favourable view towards Bitcoin and the crypto sector in general and could potentially move to replicate the El Salvador experiment.
Among these are other Central and South American countries such as Brazil, Argentina and Nicaragua, all of which have either voiced support for El Salvador’s adoption of Bitcoin or have politicians and populations that are broadly supportive of cryptocurrency technology.
Meanwhile, away from the Americas, the European island nation of Malta is also considered a candidate due to its booming tech sector, although any moves to adopt Bitcoin could potentially draw ire from its fellow EU member states and the Brussels establishment.