The El Salvador Bitcoin Act is about to come into effect. Which country will follow the lead of El Salvador?

Seven days later, El Salvador will officially become the first country in the world to adopt Bitcoin as legal tender. Although it is only a country with a small gross domestic product (GDP), the first step is always the most difficult to take. The domino effect caused by this event may bring more outstanding participants in the next few years.

“The domino effect is a wonderful manifestation of the succession of social, economic and geopolitical events.” El Salvador is the first domino, and there will be more in the future. Bitcoin and decentralization were once regarded as a far-fetched reality, and allowing a country to recognize Bitcoin as a currency brings this reality closer than ever.

Recalling the history of Bitcoin in El Salvador

It all started in January 2020, when Bitcoin began to become the standard for the economy of El Salvador’s coast. The local non-profit organization “Bitcoin Beach” created a circular Bitcoin economy for two coastal villages without bank alternatives. Subsequently, the non-profit organization gained widespread attention by receiving donations from local anonymous philanthropists (it is said that the cost of buying bitcoin is $0.05), and established a parallel economy that uses bitcoin to solve practical problems.

In El Salvador, access to traditional financial services is limited because more than 70% of the population does not have a bank account. This reality prompted Jack Mullers, the founder of the Lightning Network payment application Strike, to launch an application that was then only available in the United States in El Salvador in March.

“The launch of our first non-US market in El Salvador is a strategic move,” Marles said. “No other fintech company can launch and operate in such a market. This is just because Strike is built on Bitcoin, which is the world’s first open currency network. Our success in El Salvador can be replicated to billions of inaccessible People develop financial services.”

By April, Bitcoin was already helping El Salvador fund their national surfing team and planning a training facility, and the men’s and women’s El Salvador surfing team was signing their first paid contract in history, funded by “Bitcoin Beach”. This move to help strengthen the Bitcoin Beach plan quickly gained attention.

The well-known Bitcoin blog Mallers said in the Salvadoran feature video program “What Bitcoin Did”: Salvadoran President Nayib Bukele (Buker) indirectly invited him to the meeting, which led to President Bukele sending a message to Congress in June A bill to make Bitcoin a legal tender.

The bill will take effect on September 7, 2021 (7 days later), making Bitcoin officially legal tender in El Salvador.

Bank of America (BofA) stated that cross-border remittances account for 24% of El Salvador’s GDP, and this industry can benefit from Bitcoin. Bank of America said that peer-to-peer electronic cash “may reduce transaction costs” compared to traditional remittance channels. Recipients can get a greater proportion of the inflow of funds, “increase their disposable income and reduce the proportion of remittances flowing to financial intermediaries.”

In addition, with a clear Bitcoin regulatory framework, El Salvador has a unique advantage to attract Bitcoin companies from all over the world. A small step in this direction has turned Wyoming and Miami into Bitcoin hubs, so a completely clear Bitcoin regulatory framework will be a unique advantage for El Salvador. Miners in particular may find that this Central American country is an attractive place for business, because El Salvador also has abundant, cheap and clean energy. The country’s volcano provides BTC miners with an opportunity to develop mining, and President Buckler has publicly invited them and explained the advantages of volcanoes as a mining energy source.

Another potential benefit of El Salvador’s adoption of Bitcoin as a currency has to do with tourism. By adopting a stateless currency, the country will attract global citizens to visit and even live there. The combination of beautiful beaches with friendly regulations and taxes may be enough to bring many Bitcoiners to this small land to further develop and nourish the local economy.

Locals in El Salvador have concerns about Bitcoin

According to a report by Business Insider, a well-known online news site in the United States, a small group of protesters took to the streets one week before El Salvador adopted Bitcoin as legal tender, and the adoption of Bitcoin in El Salvador encountered small-scale protests.

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The reasons why the protesters opposed the adoption of Bitcoin included simple political opposition to President Buckler, concerns about price fluctuations denominated in dollars, and misunderstandings of the new law.

The passage of this law will be revolutionary and may free El Salvador from the tireless money printing behavior of the United States. At the very least, Bitcoin will provide Salvadorans with another option to trade and store wealth, and perhaps more importantly, Bitcoin will provide citizens with a new way to receive payments and remittances without commissions.

According to ” Business Insider” reports, local media sources in El Salvador said that the protesters believed that Bitcoin would pose a serious threat to El Salvador’s economy. One argument is that just as the Salvadoran government cannot control the devaluation of the U.S. dollar on which they are currently dependent, they cannot control the Bitcoin economy.

The frequently used argument about Bitcoin’s volatility is that it only works when you compare it to assets such as the U.S. dollar, which has been inflated for a long time. Bitcoin itself has a supply cap (a total of 21 million).

Another topic against the adoption of Bitcoin in El Salvador is that Bitcoin may promote corruption in the form of money laundering and private transactions, but this is a complete misunderstanding of how Bitcoin works. Unlike the U.S. dollar, every transaction on the Bitcoin network is public and can be tracked at any time.

Although the arguments against the adoption of Bitcoin in El Salvador are rather weak, it remains to be seen what will happen. The financial community will pay close attention to this “bitcoin experiment” in El Salvador in the weeks following September 7.

Following in the footsteps of El Salvador, Panama is still expected to become the leading Bitcoin adopter

Since El Salvador passed their bill to adopt Bitcoin as a legal currency, the entire cryptocurrency community has been eagerly guessing which country will become the second country to pass the Bitcoin bill, thereby further promoting Bitcoin’s influence on the world stage. And popularity. As one of the eight countries where government officials have publicly switched to laser eyes on Twitter, Panama may be the next country to pass the Bitcoin bill. Although Panama’s total population of 4.3 million is less than El Salvador’s 6.5 million, the global impact of the second legislative center with Bitcoin will be immeasurable.

Gabriel Silva, an independent member of Congress of Panama, stated that he will introduce the Bitcoin bill shortly after the announcement of the Bitcoin bill in El Salvador. In mid-June this year, Silva established a Telegram group open to the public, allowing Panamanians to help formulate the bill according to their preferences, and it will be released in August. This group quickly divided into two camps: “Bitcoin only” and “Altcoins included.” Although thousands of messages have been discussed in the community, we still haven’t seen the bill proposed by Silva.

Below is an interview with Josh Donner, a well-known blogger in the cryptocurrency community, with two local Bitcoin enthusiasts in Panama. Let’s see how Panama’s “relationship” with Bitcoin is and how Panama has become the next country with Bitcoin laws. The latest outlook for the country.

Interview with @Abelito (阿贝利托)

Abelito is a Bitcoinist and is pushing the Panamanian Bitcoin bill.

How close do you think we are to Panama passing the cryptocurrency bill?

Albert: “Silva is an independent member of Congress, so he will face an uphill battle because he is not in the leading party. Panama has four main parties.”

“His bill must pass an economic committee composed of seven members of Congress. If it passes, it will enter the 72-member Congress, and they will hold three separate discussions. These meetings may take weeks to months. time.”

“Unlike El Salvador, Panama’s GDP does not rely on remittances, thus reducing the incentive to pass the bill quickly.”

Bai Ze’s Note: Only 0.9% of Panama’s GDP (gross domestic product) comes from remittances, and remittances account for 24.1% of El Salvador’s GDP.

What is Silva’s current position on the Bitcoin bill?

Abelito: “We have been giving him advice, but we don’t know what suggestions he will make. However, he did say that it will be made in August. He may propose a general cryptocurrency bill, not just applicable The bill for Bitcoin. I’m not so worried, because eventually Bitcoin will win.”

Why do you think it should be a Bitcoin-only bill?

Abelito: “Many people in Panama do not have bank accounts and taxes. In Panama, there are many more mobile accounts than bank accounts.”

Bai Ze Note: As of 2015, it is estimated that 70% of Panama’s population does not have a bank account.

“Panama’s adoption of Bitcoin makes sense because (1) it does not have its own currency, (2) the U.S. has used the U.S. dollar as a political weapon by cutting off supplies to blacklisted countries, and (3) the depreciation of the U.S. dollar hurts dollarized countries, Especially because they did not get any stimulus funds from the US government.”

“Now, Bitcoin’s Lightning Network allows easy transfer and collection of money, so Bitcoin is in a good position to become an important part of Panama’s financial system. If it were not for this year, 2024 may have a better opportunity because it will It’s a new government.”

Why might the Bitcoin bill fail in Panama?

Abelito: “Panamaans don’t like anything the government imposes on them, so the government wants to see bottom-up reforms driven by the people. Panama may be a bottom-up push you have to do, not like El Salvador That’s a situation where consensus is reached from top to bottom.”

El Salvador’s Bitcoin bill has benefited from the push of “Bitcoin Beach”, which can also be used as an example of Bitcoin’s operation in real life. Has Panama made a similar example?

Abelito: “Some people in Panama now use Bitcoin as a payment method for services, but it is not as popular as “Bitcoin Beach”.”

What do you think will be the next country to adopt Bitcoin as legal tender together with El Salvador?

Abelito: “First of all, I don’t trust politicians very much. Many people use laser eyes because they want to gain popularity.”

“Secondly, Latin American countries need the U.S. dollar because they see the depreciation of their currencies and expect the U.S. dollar to stabilize. They see problems with their currencies, but they don’t have a U.S. dollar bank account. Their expenses are small because they earn very little. They earn. Everything you take is physical and U.S. dollars. Bitcoin’s layer 1 itself is unlikely to be adopted by people. And the Lightning Network will make it really work. Therefore, once people understand the benefits of adopting Bitcoin through the Lightning Network, they will Request.”

“Paraguay is interesting because they have launched a hydropower energy project called Itaipu Dam with Brazil, which generates a lot of excess energy they want to use for Bitcoin mining. However, there is a rule that miners must Register with the government, otherwise you will face the risk of imprisonment.”

“The next one might be small countries like Honduras and Guatemala, or other countries that send a lot of money.”

“I don’t expect there will be any countries this year. It may depend on which countries have adopted the Lightning Network the fastest.”

Interview with Joseph Issa:

Joseph Issa, who is 23 years old, drafted a cryptocurrency bill that is currently being reviewed by Panama. If the bill passes, it will make Bitcoin and three other cryptocurrencies the legal tender of Panama.

What inspired you to write the proposed bill?

Joseph: “We must understand that the world is changing. 10 years ago, no one thought that cryptocurrency would become popular today. Now El Salvador is accepting Bitcoin as a currency, and Panama has a new possibility to become the leader of this movement. If Panama accepts Bitcoin as a currency will create a free economy and make it the center of cryptocurrency.”

Who did you send the cryptocurrency bill to?

Joseph: “The Panamanian Parliament has a procedure. If you have an idea, you can write a bill and send it to the Panama City office. The proposal must go through many legal procedures to survive. My bill has passed the Panamanian Parliament’s legal office. . It’s now in the first debate and must be discussed/reviewed by seven deputy senators who can approve, add or reject any part of the bill.”

“If it passes the first debate, it will enter the second debate in the parliament. By then, all 72 deputy senators will discuss the item. If it passes, it will enter the third debate, with all representatives and NGOs , University professors, and others. If it passes the third debate, it will be submitted to the President, who will discuss it with the Minister of Economy, and then sign it into law.”

Are there other Bitcoin bills under consideration?

Joseph: “A similar bill was proposed in 2019, but it was not passed. The difference is that my bill aims to make Bitcoin a currency, while the other law just tries to make it a digital asset. Supervision.”

“Deputy Gabriel Silva announced that he plans to introduce a bill in March, but it has not yet been announced. I introduced my bill in mid-May.” 

“I also submitted another bill on cryptocurrency mining, and the Economic Commission is reviewing it.”

When will we know whether your bill will enter the second debate?

Joseph: “The cryptocurrency bill may be approved for the second debate within a week or up to three months. It has been two months since the proposed bill was submitted. They added an article stating that the government will commission an analysis of the project. “

How long does it take for the cryptocurrency bill to pass in Panama?

Joseph: “Much depends on how the price of Bitcoin will perform in the next few weeks and months. If it rises, the views of representatives and the president will be positive, and they will favor Bitcoin more. Another factor It is El Salvador’s success in introducing new laws. This will seriously affect the urgency of Panama and other countries to pursue their own bills.”

What do you hope the result of Panama passing the cryptocurrency bill?

Joseph: “I hope and expect that the employment rate will increase, because through this bill, I propose that Panama can bring new foreign investors to the country. It is the country with the fastest internet speed in Central America. Therefore, it will increase The economic friendliness of foreigners and citizens.”

Who do you think will be the next country to join El Salvador to adopt Bitcoin as legal tender?

Joseph: “Maybe Colombia or Costa Rica. Colombia has American companies like Amazon investing in them. Costa Rica has Walmart investments. Cryptocurrencies seem to be very popular. If companies like Amazon and Walmart start accepting Bitcoin, it might Prompt these countries to pass a Bitcoin bill like El Salvador more quickly.”

Although it may take a long time to wait for the second country to pass the Bitcoin bill, it will definitely happen, and this country may be Panama. As Abelito and Joseph in the interview said, Panama is full of bright minds and will put positive pressure on their government to make Bitcoin an important part of their creation of a better future.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-el-salvador-bitcoin-act-is-about-to-come-into-effect-which-country-will-follow-the-lead-of-el-salvador/
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