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Which country will follow El Salvador to make Bitcoin legal tender?

·Finance reporter
·4-min read
Customers shop at a street market as Salvadorans prepare for Christmas amidst the COVID-19 pandemic on December 14, 2021 in San Salvador, El Salvador. (Photo by Camilo Freedman/APHOTOGRAFIA/Getty Images)
Salvadorans prepare for Christmas amidst the COVID-19 pandemic using Bitcoin to buy items. (Source: Getty)

On June 9, 2021, cyptocurrency history was made.

El Salvador became the first country to officially classify Bitcoin as a legal currency.

Salvadoran President Nayib Bukele proposed to recognise the world's first, and arguably the most popular, cryptocurrency as legal tender and the country's lawmakers agreed.

Bukele said the move 'would make it easier for Salvadorans abroad to send money home'. Within weeks, 200 Bitcoin ATMs were being installed around the country.

To bolster the currency’s use, the government created a cellphone application called Chivo Wallet.

This allowed citizens, many of those who do not have bank accounts, to send and receive Bitcoin-denominated claims, convert them to dollars and withdraw them from special ATMs.

It also gave $30 in Bitcoin to every Salvadoran who adopted the wallet.

After this feat, many are getting impatient with wondering which country will be next when it comes to legalising Bitcoin.

Let's look at Ukraine. For years, cryptocurrency trading has been operating under cover of darkness in the Ukraine as no laws have defined what virtual tokens like Bitcoin are allowed to be used for.

However, that all changed in September when the Ukrainian parliament passed a law that legalised and regulated the sector.

Cryptocurrencies are now seen as non-monetary assets. Ultimately, this will make it possible for crypto businesses to trade and pay taxes legally, but doesn’t allow for the use of crypto in exchange for goods and services.

This new law, which is expected to pass again before the end of the year, must be signed by President Volodymyr Zelenskyy.

Ukrainian President Volodymyr Zelenskyy speaks with U.S. President Joe Biden over the telephone in his office in Kyiv, Ukraine, Thursday, Dec. 9, 2021. (Ukrainian Presidential Press Office via AP)
Ukrainian President Volodymyr Zelenskyy. (Source: Associated Press)

According to the Ukrainian draft bill, the law will regulate 'legal relations arising in connection with the turnover of virtual assets in Ukraine, defines the rights and obligations of participants in the virtual assets market, the principles of state policy in the field of virtual assets'.

Put simply, the law will protect the owners of virtual assets and exchange platforms from fraud.

Ukraine is the fifth country in as many months to set up ground rules for digital currencies following El Salvador’s move to adopt Bitcoin as legal tender.

But Ukraine has not gone as far as El Salvador, which accepts Bitcoin as an official form of payment alongside the US dollars.

Also in September, The island National of Cuba also legalised crypto a legal method of payment for commercial transactions.

The Interest in crypto over the last few years with virtual currencies has been associated by many with the possibility of financial freedom for many in the country.

The tightened embargo rules imposed under former President Donald Trump also popularised Bitcoin and cryptocurrencies as it has become much more difficult to use US dollars. President Biden has been following Trump with these rules.

Many countries worldwide are struggling on how to deal with a decentralised currencies.

China infamously banned banks from collaborating in bitcoin transactions. Beijing has also gone that extra mile to dispute Bitcoin mining.

Verifying Bitcoin transactions consumes a lot of energy and this has turned some countries off mining bitcoin, as is the case with Iran. They have temporarily banned Bitcoin mining for fear of power outages.

A street light that is off is pictured while power blackouts in northern Tehran at night.
Power blackouts are quite frequent in Tehran. (Source: Getty)

But things are different in South American countries. They are extremely confident in Bitcoin. Cryptocurrencies are also popular in countries such as Argentina and Venezuela, which are being tormented by hyperinflation.

In Panama, a neighboring country of El Salvador, there are also legislative initiatives to make Bitcoin legal. Panama may very well be the next country to legalise Bitcoin.

Over in Europe, Switzerland is known as one of the most zealous countries when it comes to cryptocurrencies. The city of Zug in particular is a real hub for crypto companies, which can even pay their taxes in Bitcoin.

Back in the USA, many corporations, including Tesla CEO Elon Musk, see a huge potential in cryptocurrency.

Some businesses like restaurant chains, delivery services and online stores have begun accepting payments in Bitcoin.

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