Following El Salvador, will another country classify Bitcoin as legal tender by December 31, 2021?
Closed Aug 17, 2021 01:00PM UTC
Context. On June 9, 2021, the president of El Salvador, Nayib Bukele, announced that the Salvadoran Congress had voted to make Bitcoin legal tender. Legal tender is money that courts of law are required to recognize as satisfactory payment for a monetary debt.
Making cryptocurrencies, such as Bitcoin, legal tender has several benefits for developing countries without sophisticated financial systems. For one, it makes their economy less vulnerable to inflation caused by the actions of other country's central banks. Bukele cited recent actions by the U.S. Federal Reserve as one of the motivations for El Salvador's new law. Second, it makes it easier to send money without having a bank account. El Salvadorans living outside the country sent $5.92 billion to friends and family in El Salvador in 2020. According to Bukele, "a big chunk of those 6 billion dollars is lost to intermediaries." Third, it makes their economy more attractive to crypto entrepreneurs.
There are risks, however. According to The Independent, "Speculation within bitcoin forums and among crypto commentators on Twitter is that the US could target El Salvador with sanctions, as it represents a threat to the strength of the US dollar - the other official currency of the country. One way to potentially mitigate against this risk would be for countries that accept bitcoin as legal tender to form an economic alliance."
Paraguay and Panama appear closest to making Bitcoin legal tender, with politicians in both countries claiming they will introduce legislation similar to El Savador's. The Independent states that "elected officials in Argentina, Brazil, Mexico and Nicaragua have all spoken favourably about bitcoin, with some pledging to introduce legislation that is favourable to cryptocurrencies."
Resolution details. This question resolves based on popular media reporting that a country other than El Salvador has taken the legal steps necessary to make Bitcoin legal tender. The question resolves positively if the legal steps, such as legislative approval of a new law, are completed by December 31, 2021, even if the law would not go into effect until a later date.
This question was proposed by Mauricio_B.
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Cuba has recognized bitcoin as legal payment for certain transactions but not as legal tender.
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