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One of the main knocks against cryptocurrency has always been that it will never gain universal adoption, meaning its usefulness will always be limited. This perhaps changed forever on September 7, 2021, when El Salvador officially became the first country in the world to accept Bitcoin as legal tender.
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While adoption by a small central American country isn’t enough to cement Bitcoin’s status as a real-world currency, it could be the first domino to fall. Other countries are already studying El Salvador’s historic move, and if they deem it to be viable, Bitcoin may indeed be on its way to universal acceptance. Here are four other countries to watch, as they seem to be among the most likely to follow El Salvador’s example.
Panama borders El Salvador, so perhaps it shouldn’t be too surprising that it’s on the short list of companies that may soon make Bitcoin legal tender. And, unlike many other countries that are rumored to be considering the move, Panama actually drafted legislation to make Bitcoin legal tender the very day after El Salvador officially adopted the cryptocurrency.
Although no law has yet been passed, Panama is the country furthest along in the race to be the second country to adopt Bitcoin as legal tender.
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Cuba hasn’t fully adopted cryptocurrency as legal tender, but it has made movements in that direction. Officially, the country now recognizes and regulates cryptocurrencies, meaning its citizens are free to use them. This move came about in part due to tightening regulations by the U.S. on money transfers between Cuba and the United States, including the closure of all 400-plus Western Union offices in the country.
Now, Cuban citizens can use cryptocurrency to make money transfers, and they can even get paid for their work in crypto.
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Ukraine hasn’t quite legalized cryptocurrency as legal tender, but it’s taking steps in that direction. In Sep. 2021, the country’s parliament adopted a law legalizing and regulating cryptocurrency in a nearly unanimous vote. The country is making more concrete statements about its future position in the crypto world, as well.
According to the New York Times, just two years ago, the country created a Ministry of Digital Transformation, and its deputy minister Alexander Bornyakov says, “The big idea is to become one of the top jurisdictions in the world for crypto companies. We believe this is the new economy, this is the future and we believe this is something that is going to boost our economy.” Other reports suggest the country will operate a “dual currency state” as early as 2023, with Bitcoin and the country’s fiat currency hryvnia co-existing as legal currencies.
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Shortly after El Salvador announced its bill to make Bitcoin legal tender, a member of Paraguay’s Chamber of Deputies proposed a bill to legalize and regulate cryptocurrency in the South American nation. The same politician, Carlitos Rejala, plans to make a presidential run in 2023, and part of his platform would be to make Bitcoin the country’s official currency.
Whether or not this comes to fruition is a crapshoot, but if momentum builds behind Rejala’s proposals, Paraguay could be in the fast lane for Bitcoin adoption.
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Where Does the U.S. Stand on the Issue?
Although 27% of U.S. citizens want their government to adopt Bitcoin as legal tender, according to a survey by YouGov, that’s highly unlikely to happen. For starters, the U.S. government considers the unregulated cryptocurrency market as likely to cause more harm than good. Undoubtedly, this is due in part to the fact that as an unregulated market the U.S. government has no control over, either in how it’s used or in how it may be potentially taxed.
But an additional reason may be that the Federal Reserve Board is actively considering the idea of issuing a digital currency of its own. The U.S.-issued cryptocurrency would be a digital form of cash that would be backed by the Fed itself, theoretically making its price more stable and its existence more viable. However, even if the idea gains Congressional support, it’s not likely to become a reality for many years.
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