Key takeaways:
- Tongan bigwig Lord Fusitu’a predicts that his country will embrace Bitcoin by November, citing a judgement that is nearly the same as the El Salvador bill.
- Lord Fusitu’a, a former Tonga member of parliament, provided an ETA for Bitcoin becoming legal cash in Tonga in a series of tweets. Following El Salvador’s lead, the action has the potential to bring over 100,000 Tongans onto the Bitcoin network.
Several governments have been considering adopting Bitcoin as a legal tender, Tonga is the most recent country to enter the fray.
Lord Fusitu’a, a former member of Tonga’s parliament, disclosed that the country’s Bitcoin legal money bill is “modelled on” and “nearly identical” to that of El Salvador.
Tonga is a small island nation that relies on remittances from Australia, New Zealand, and the United States to survive. According to the International Finance Corporation, Tonga earns more money from remittances than any other country in the world, with remittances accounting for up to 30% of household income.
Furthermore, the Tongan diaspora is large, despite the fact that the Tongan population is only in the six digits. The International Organization for Migration reports that 126,000 Tongans live overseas, with 18,000 Tongans living in Australia.
El Salvador’s introduction of BTC as legal money was largely driven by the remittances use case. According to the World Bank, Tonga’s remittances as a percentage of GDP are much larger than El Salvador’s, at 39 per cent versus 24 per cent, respectively.
The initiative might bring more than 100,000 Tongans on the Bitcoin network if it follows El Salvador’s lead.
Also, read El Salvador Launches the Bitcoin City, or the No TAX City
The president of the global Organisation of Parliamentarians Against Corruption lays out a five-point plan for adoption:
According to Lord Fusitua’s most recent tweets, the Pacific island nation of Tonga is considering adopting Bitcoin as a legal tender. According to the former MP, the Country could adopt cryptocurrencies by November of this year. By September or October, the bill in question will be filed to the House of Representatives.
- The bill is presented to Parliament in September/October. Passed.
- Delivered to the Palace Office, where it will be presented to His Majesty for Royal Assent.
- A month – HM assents to the Bill, as directed by the Privy Council.
- Two to three weeks The activation date has been specified by the government.
- #BTC becomes legal tender on the activation date.
The bill is “modelled on and is almost identical to the El Salvador bill,” Fusitu’a stated in a follow-up comment.
Tonga’s Lord Fusitu’a was said to be working with Jack Mallers, the CEO of Strike and the architect of El Salvador’s Bitcoin initiative, to bring the Bitcoin legal framework to the country.
He has been outspoken about the Bitcoin industry, claiming that it will help the country become more “competitive and wealthy” if it welcomes it. His focus has been on the remittance benefits that Bitcoin provides, which may assist citizens in terms of long-term savings.
Before the Tongan put the record straight, the revelation created the seeds for inquiries, predictions, and outright jubilation on Bitcoin Twitter. “Boom!” he exclaimed as he eagerly stated that BTC becoming legal tender may come as early as November or December this year. In a tweet, he said, “That’s us, brother!”
Tonga was widely expected to become one of the first countries to accept BTC as legal cash in 2021. Following Lord Fusitu’a podcast with Bedford-based Bitcoiner Peter McCormack, speculation reached a fever pitch.
In response to a follow-up question about how a circular economy based on Bitcoin would be beneficial, the former MP stated,
“An economy that uses bitcoin for payment at every stage of the supply chain. From the seed to the table. Pay for cassava roots and cattle in bitcoin from the farming supplier all the way to the waitress serving it to you at Kardo’s steak bar and every step in between in BTC.”
The then-member of parliament shared the remittance case for adopting BTC as legal cash during the conversation. Adoption, he suggested, would cause:
“A disposable income increase by 30%. With that extra 30%, some (people) are going to be saving it rather than putting it into the economy and stacking sats.”
Last year, the youthful, outspoken President of El Salvador, Nayib Bukele, made history when he pushed for Bitcoin to be recognised as legal cash. His actions, however, have not won over some analysts, who feel he may have cost the government $10 million as a result of the crypto market crash.
For the first time since September 2021, Bitcoin has fallen below $41,000. It’s worth noting that this was the same month when El Salvador embarked on a buying binge for the asset. El Salvador spent roughly $71 million on Bitcoin last year, with an average buying price of $51,056 per BTC. If the government hasn’t sold its crypto holdings, the portfolio has lost almost 12% of its value.
