El Salvador ranked first in the world: in mid-2021, the Central American country became the first country in the world to introduce Bitcoin (BTC) as legal tender, as can be read on the website for news and information or cryptocurrency Bitcoins. Following this example seems to be the case here as well. A former Tongan parliamentarian claims that his country will also accept Bitcoin as legal tender in November 2022. More than 100,000 Tongans could then start using the Bitcoin network for payments.
Lord Fossetwa, the former MP involved, discussed the matter in a thread of tweets on his Twitter account. He describes a five-step plan that should lead to the adoption of Bitcoin as legal tender in the Polynesian island nation. Fusitu’a talks about a bill modeled on the same bill in El Salvador and even nearly identical to it. The speculation that emerged last year about Tonga being one of the next countries to adopt bitcoin appears to be based on the truth. Incidentally, that speculation was based on a podcast with the same Lord Fusitwa.
Money transfers from abroad
But what does Tonga actually gain from accepting bitcoin as legal tender? The remote island nation relies on money transfers from countries such as the United States, Australia and New Zealand. The International Finance Corporation estimates that she gets more income from her than any other country in the world, up to 30 percent of the average household income. how is that possible? The population of Tonga living outside of Tonga is greater than the number in the island country itself. It is very important for them and their families in Tonga that money can be transferred easily and inexpensively.
There are also local advantages to accepting bitcoin, according to Fusitu’a. Tonga can create a circular economy with Bitcoin. This is partly because the country is sparsely populated. However, there are also challenges standing in the way of the successful adoption of Bitcoin and the creation of this circular economy. In 2017, only 50 percent of Tonga’s population was connected to the internet, which is necessary to use the Bitcoin blockchain. However, according to Fusitu’a, today more than 90 percent of the country’s population owns a smartphone with Internet access. This should have largely solved the problem.
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