Cryptocurrencies had a great year in 2021. In this period, we have seen the market go from being classified as a billion-dollar economy into a trillion-dollar economy. Aside from that, cryptocurrencies are gaining visibility in the mainstream world with, for example, El Salvador's adoption of Bitcoin as the official digital currency. As a result, investors are looking for the "new Bitcoin" on the market, hoping to find a great alternative in so-called altcoins. Unfortunately, many traders value an altcoin exclusively…
Another nation may be on the way to adopting a Bitcoin standard, making the cryptocurrency legal tender.
Lord Fusitu’a – a former Tongan MP – recently said that he expects his country to pass a Bitcoin legal tender law by the end of the year. The bill is intended to model El Salvador’s Bitcoin law, which made it an official currency in September.
Is Tonga Next?
Fusitu’a offered his prediction in a tweet on Friday, outlining the steps to put Tonga on a Bitcoin standard. He said that the bill would be issued to parliament in September or October once private MPs could table the legislation. The ruling monarch can then be given ascent and have an activation date set within weeks.
Tonga is a tiny Pacific island nation and the most remittance-dependent country globally. According to World Bank figures, at least 38% of Tonga’s GDP comes from remittances.
As such, Fusitu’a – a Tongan royal – has been highly vocal about integrating Bitcoin as the nation’s official currency. Specifically, he wants to use the lightning network as a fast and cheap payment rail to ditch Western Union’s fees, much like El Salvador.
As such, the MP has reportedly been in conversation with Strike CEO Jack Mallers, who helped inspire El Salvador’s law and enable Bitcoin remittances. Mallers most recently brought his organization to Argentina, which desperately needs cheap dollar payment infrastructure.
Fusitu’a envisions a circular economy in Tonga which is fully Bitcoin-integrated.
“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,” he said.
Against The Odds
The Financial Review spoke with Fusitu’a in October about this exact topic. The MP showed confidence that he could get an El Salvador-esque bill to pass in his country, overcoming political resistance.
However, Sione Ngongo Kioa – governor of the Reserve Bank of Tonga – said such a law would be “unlikely”.
Nayib Bukele – President of El Salvador – has already received significant criticism from the World Bank and IMF for implementing the law. Yet Bukele is only doubling down on his commitment to the asset and has even started mining Bitcoin using geothermal energy.