Over the years, the stand for cryptocurrencies has been changing rapidly. Several countries are not just supporting them but are also accepting crypto and making them legal tender. Even big powers like the US and UAE are forming regulations to allow the use of cryptocurrencies in a legal manner.
One of the events that ignited this change on a global scale was the adoption of BTC as the nation’s official currency by El Salvador alongside the US dollar. This decision helped in paving the way for other governments so they can follow suit and leverage the unparalleled benefits of blockchain technology and digital assets.
Today, El Salvador, Laos, Switzerland, Portugal, Singapore, Nigeria, and Ukraine are leading the charge in crypto adoption. Moreover, as more and more countries adopt Bitcoin as legal tender, the aim of making cryptocurrencies a regular part of our day-to-day lives becomes closer. This dream has already begun taking shape as now several retail merchants, eCommerce platforms, brands, and global giants accept Bitcoin as any other fiat currency.
However, the ability to purchase a cup of coffee with Bitcoin is something that the industry is aiming for, and seeing the progress rate, this dream is not far away anymore. Now Bitcoin’s ease of use has increased multifold, and now users are able to make payments using smartphone-based digital wallets, making the digital currency more tangible and practical.
Advocates all over the world believe that the adoption of Bitcoin and other cryptos as legal tender will strengthen the country’s economy by creating a fully inclusive and functional financial system. Let’s understand the mindset of some nations which have welcomed Bitcoin along with other cryptocurrencies.
What’s been happening on a national scale?
The very nature of cryptocurrencies and blockchain technology is to design a financial system that is free of control from any centralized institution. This idea gave birth to the concept of decentralized finance, which is flourishing right now and has integrated several centralized finance services such as trading without restrictions and opaqueness. However, no new technology that has advanced the world multifold came into existence without some kind of resistance.
However, it’s the leaders and advocates that push through the resistance to a better future, and with cryptocurrencies, it has been no different. Last year in September, El Salvador became a symbol of a beacon for the cryptocurrency industry as the crypto-bullish president Nayib Bukele decided to approve Bitcoin as a legal tender, becoming the first country to do so. While the country itself is small, this decision made a huge impact on the industry. It was the first time in history that a central government accepted cryptocurrencies, setting the stage for additional governments in their due time.
However, this was not the first interaction of El Salvador with Bitcoin. In 2019, the small seaside village, El Zonte, in El Salvador received an anonymous gift of $100,000 worth of Bitcoin. After this incident, the village came to be known as Bitcoin Beach, which was a small stone that set out large waves in the pool of crypto adoption.
Of this anonymous donation, the Central American Republic has become pro-Bitcoin and approved Bitcoin as a legal tender with a unanimous parliamentary vote. Moreover, Panamanian lawmakers also recently approved a bill allowing their citizens to use Bitcoin along with eight other cryptocurrencies to make daily payments and purchases.
Following this development, other countries such as Laos, Switzerland, Portugal, Singapore, Nigeria, and Ukraine have taken the reins and are now becoming crypto-friendly with government-accepted regulations to monitor the use of cryptocurrencies. This development is huge considering that a few years ago, Bitcoin was facing scrutiny.
What’s happening on a global scale?
One of the biggest pros of cryptocurrencies is their ability to eliminate the barriers of traditional finance and bank the unbanked to provide everyone with access to financial services. This ability of cryptocurrencies plays a significant role in boosting their adoption as, according to the World Bank’s Global Financial Inclusion Database, over 1.7 billion adults globally are unbanked. They rely solely on fiat to make all the transactions that are not efficient or reliable.
But still, there is some resistance from some centralized institutions as Bitcoin is volatile and (still) unreliable for being used as the primary currency. However, this problem is solved by the popular stablecoins that are backed by fiat assets such as USDC or USDT. These stablecoins hold their value while offering all the benefits of cryptocurrencies, such as decentralization, global access, transparency, and more.
The US has been showing signs of accepting stablecoins as a part of its legal, financial system as long as the stablecoins are regulated. Moreover, about 30% of the US residents support the decision to make Bitcoin a legal tender.
Other countries are also slowly realizing the importance of digital assets and cannot ignore the unparalleled benefits anymore. This progress has led to a wide-scale crypto adoption and a boost in the industry’s growth.
Despite several restrictions and allegations, the crypto industry is still going strong and will continue to do so as it establishes its root in different sectors of the world. At this point, it is very simple: either country will adopt the new and improved financial system that relies on blockchain technology, or it will remain captured in the old one that is slow, unreliable, and exclusive.