Can developing countries follow El Salvador use Bitcoin?

[Liamttw]

Since El Salvador became the first country to approve Bitcoin as a legal tender, it has become international news and has attracted attention from the market, especially the cryptocurrency market. Many countries are paying close attention to this big move.
Using Bitcoin in El Salvador can bring meaningful social benefits to many people who do not have a bank account and cannot access basic financial services. People can benefit from the potential of low-cost remittances and durable savings accounts that are not affected by money supply expansion and hyperinflation. And with the advent of the Lightning Network, using Bitcoin as a payment method has become more feasible.

“We build our own future. So why do we have to resign ourselves to a dystopic future?” said President Bukele. “This will be a huge game changer not for El Salvador but for the world. It’s beautiful to be part of a huge change in humanity.”

The whole world is watching the important first step taken by El Salvador. Using Bitcoin is not just a trend, other countries will eventually learn that Bitcoin can increase national wealth, and some even keep it in their treasury reserves. With Bitcoin the longer you wait, the rewards will start to decrease. Countries at a disadvantage may consider taking measures as early as possible to give them an advantage over other larger economies. So will more countries follow El Salvador to use Bitcoin as legal tender?
https://www.forbes.com/sites/lawrencewintermeyer/2021/08/05/could-developing-nations-follow-el-salvadors-move-to-bitcoin/?sh=e930afe28b70

[Maxine4466]

I'm afraid not.
link about El Salvador's recognition of Bitcoin:

https://bitcointalk.org/index.php?topic=5342087.0
as this article https://www.coindesk.com/president-of-el-salvador-says-hes-submitting-bill-to-make-bitcoin-legal-tender put it:
"the fiscally unstable and oppressively poor Central American nation, where 70% of residents lack a banking account. El Salvador’s gross domestic product was $24.6 billion in 2020, according to Statista."
Thus we can see the main reason behind El Salvador's policy:
1. it's poor, which indicates weak government and fiat
2. 70% of residents have no bank account
3. expensive and inconvenient cross-border payments
4. dislike for the exploitation imposed by USD on their fiat
It counts on the concrete national condition. some developing countries like China are rather different to El Salvador, so I don't think China will follow El Salvador, at least for a short term. and as far as I know, China has launched its own DCEP
[/list]

[Charles-Tim]

Some countries are Bitcoin friendly while some countries are not. After the El Salvador move by accepting bitcoin as a legal tender, there has been two bills already in two countries to accept Bitcoin as a method of payment. The first was propose by a sanator in Uruguay to make Bitcoin as a means of payment in legal businesses, while the other is a new cryptocurrency-related bill in Ukraine which will allow payments in cryptocurrencies like Bitcoin (BTC). But both are not recognizing Bitcoin and other cryptocurrencies as a legal tender.

It is very possible some countries will become more bitcoin friendly, but some will be hostile against Bitcoin, even if not to comment much on China which is a developed country already, we can still comment on developing countries in North Africa and also Nigeria in the west Africa. Nigerian government generally are not hostile against Bitcoin, but the central bank is against crypto transactions. Some countries see Bitcoin as a means citizens can have privacy, able to make use of money without them (the government) involved, and because of this, they will against bitcoin. But no matter what, Bitcoin gives privacy and also appreciative, the reason people like to buy it.

[Melody kdl]

I personally think it is possible. For smaller countries, this is a very possible move, and larger countries will move forward.It's good news that's for sure but concerns regarding network congestion, cyber attacks, and offline transactions are important elements too. I hope El Salvador gets the infrastructure to counteract these, but these factors need resolution for developing countries to see BTC and cryptocurrencies as viable tenders。We cannot ignore the potential of BTC as a centralized currency.

[eaLiTy]

Since El Salvador became the first country to approve Bitcoin as a legal tender, it has become international news and has attracted attention from the market, especially the cryptocurrency market. Many countries are paying close attention to this big move.

All the countries are monitoring the BTCitcoin market for a long time to come out with rules and regulations and i am not a big fan of any country forcing the citizens to comply with anything as i have seen many protest from El Salvador regarding this.

Using Bitcoin in El Salvador can bring meaningful social benefits to many people who do not have a bank account and cannot access basic financial services. People can benefit from the potential of low-cost remittances and durable savings accounts that are not affected by money supply expansion and hyperinflation. And with the advent of the Lightning Network, using Bitcoin as a payment method has become more feasible.

We are talking about people who are not having a bank account and you think BTCitcoin will make a change and how is that ? If you are talking about a free market then it is well and good but if you are talking about people who are finding it hard to make ends meet and they are not having a bank account because they are not having enough money to hold them in the bank and how you think a highly volatile market can save them .

[bittraffic]

The president of El Salvador is a populist so it's not difficult for him to win the bill. With the price of BTC today going up, I'm sure the president is held to be a hero once again. It may be different from other countries but there is news about Uruguay and some Latin countries already using cryptocurrencies even before El Salvador such as Venezuela.

If El Salvador country plans to operate mining farms, it's not unusual for other countries to also mine BTC.

[elda34b]

They would probably start with a city first and see what's the effect. Not every country can follows El Salvador since their demographics, gdp, etc are not the same. Even if it's similar, their ideological choices might be different. I think most government would only allows trading for bitcoin though, no more than that.

[Twinkledoe]

They would probably start with a city first and see what's the effect. Not every country can follows El Salvador since their demographics, gdp, etc are not the same. Even if it's similar, their ideological choices might be different. I think most government would only allows trading for bitcoin though, no more than that.

That's more likely to happen, not making bitcoin as legal tender but allowing it to exist in the market. They will legalize the crypto-exchange business and other related crypto businesses. But to the point of making it as legal tender, that I think, will be a long way to go for other countries. As you said, countries have different aspects to consider.

[Gozie51]

They would probably start with a city first and see what's the effect. Not every country can follows El Salvador since their demographics, gdp, etc are not the same. Even if it's similar, their ideological choices might be different. I think most government would only allows trading for bitcoin though, no more than that.

That's more likely to happen, not making bitcoin as legal tender but allowing it to exist in the market. They will legalize the crypto-exchange business and other related crypto businesses. But to the point of making it as legal tender, that I think, will be a long way to go for other countries. As you said, countries have different aspects to consider.

I think that countries that will find it very easy to adopt as legal tender at this new phase may be countries that are already using the USD as their official currency. Countries like Zimbabwe and El Salvador at least. In the case of El Salvador whose local currency is DXY started the adoption of dollar in 2001, meaning they have put the currency in dollar rate and understanding the bitcoin process won't be much challenge.

[ultrloa]

They would probably start with a city first and see what's the effect. Not every country can follows El Salvador since their demographics, gdp, etc are not the same. Even if it's similar, their ideological choices might be different. I think most government would only allows trading for bitcoin though, no more than that.

That's more likely to happen, not making bitcoin as legal tender but allowing it to exist in the market. They will legalize the crypto-exchange business and other related crypto businesses. But to the point of making it as legal tender, that I think, will be a long way to go for other countries. As you said, countries have different aspects to consider.

I think that countries that will find it very easy to adopt as legal tender at this new phase may be countries that are already using the USD as their official currency. Countries like Zimbabwe and El Salvador at least. In the case of El Salvador whose local currency is DXY started the adoption of dollar in 2001, meaning they have put the currency in dollar rate and understanding the bitcoin process won't be much challenge.

We should look only with the current USD value since the main issue here is the price changes of bitcoin, although we can say that this is a good choice for a country to adopt bitcoin but they need to know first the technicalities since I'm sure this could be their downfall if they will not do deep digging on bitcoin flaws. But I'm curious to know right now on which country will adopt next to El Salvador since this will create another big news to bitcoin.

[dothebeats]

It's very risky, almost as if it's a leap of faith. You can't really tell if it'll work or not because El Salvador is honestly just a testing ground for bitcoin and if its possible to helped developing countries. So far it's working okay-ish, though still far from the success that everyone is expecting off it, it's still something to be had. I'm just keen to know which direction should El Salvador take this if it proved helpful on its usage of bitcoin on its coastal communities and tourist spots.

[Kyraishi]

Unpopular opinion: What El Salvador did was actually nothing special and shouldn't really be celebrated.

Fact of the matter is that they are essentially selling cheap citizenship tickets to their country. It's first and foremost a publicity stunt on their side, and second a revenue raising scheme, much like how the Petro worked in Venezuela.

But yes, I think that the best strategy for most developing countries is to embrace innovation instead of stifling it, and that includes any form of cryptocurrencies including bitcoin. They have so much to gain from a corporate taxation perspective than to lose from doing so.

[Coyster]

So will more countries follow El Salvador to use Bitcoin as legal tender?

No, I'll definitely not put my money on that happening, I mean with all the talk of CBDC's and regulations, I'm pretty sure many countries do not have Bitcoin in their plans at all, what you need to understand is that Bitcoin is decentralized and can't be controlled by the government, neither do they appreciate the idea of making something they can't control or print a legal tender in their country.

I think it's only normal for governments to be hostile to Bitcoin, they do not want people to control their funds, neither do they want individuals to keep their privacy by being their own bank, thus nursing the hopes that soon many countries would make Bitcoin a legal tender is more or less like raising false hopes. But mind you that despite all the negativity from the government, Bitcoin is definitely going mainstream as sooner or later many more people would take up the responsibility of being their own bank through Bitcoin.

[Obito]

Unpopular opinion: What El Salvador did was actually nothing special and shouldn't really be celebrated.

Fact of the matter is that they are essentially selling cheap citizenship tickets to their country. It's first and foremost a publicity stunt on their side, and second a revenue raising scheme, much like how the Petro worked in Venezuela.

But yes, I think that the best strategy for most developing countries is to embrace innovation instead of stifling it, and that includes any form of cryptocurrencies including bitcoin. They have so much to gain from a corporate taxation perspective than to lose from doing so.

You really don't have to say that, also how can you be so sure that it's not special or insignificant, I mean a lot of people have heard of the news meaning that the media outlets see it as significant and they are many so your opinion doesn't really count. Also, does it have to be a big country to significant, I mean it can start this way and little by little it influences bigger countries.

[zanezane]

I think they will benefit so much doing so, it's not like it's going to be a big change but it's still a fine addition in a country that they support crypto because that only means that those countries can be hub for crypto businesses and people that are interested in crypto is going to have freedom on what they should be doing.

[kryptqnick]

Before anyone follows El Salvador, it's wise to sit tight and observe how things go there. I'm sure that this experience is interesting to many countries that are also looking for ways of improving their economies, but why rush if it can go terribly wrong or at least prove to be useless? It's better to learn from someone else's mistakes than from one's own, right? For now, El Salvador spent a lot of taxpayers' money on these $30 'welcome bonuses' in BTC, and the World Bank refused to help El Salvador on their adoption way. So it's too early to assess whether it's worth it and how it can affect the economy. I think that at least a year must pass before such analysis is applicable. And if the experiment is successful, I'm sure that other countries will try it as well.

[mindrust]

Since El Salvador became the first country to approve Bitcoin as a legal tender, it has become international news and has attracted attention from the market, especially the cryptocurrency market. Many countries are paying close attention to this big move.
Using Bitcoin in El Salvador can bring meaningful social benefits to many people who do not have a bank account and cannot access basic financial services. People can benefit from the potential of low-cost remittances and durable savings accounts that are not affected by money supply expansion and hyperinflation. And with the advent of the Lightning Network, using Bitcoin as a payment method has become more feasible.

“We build our own future. So why do we have to resign ourselves to a dystopic future?” said President Bukele. “This will be a huge game changer not for El Salvador but for the world. It’s beautiful to be part of a huge change in humanity.”

The whole world is watching the important first step taken by El Salvador. Using Bitcoin is not just a trend, other countries will eventually learn that Bitcoin can increase national wealth, and some even keep it in their treasury reserves. With Bitcoin the longer you wait, the rewards will start to decrease. Countries at a disadvantage may consider taking measures as early as possible to give them an advantage over other larger economies. So will more countries follow El Salvador to use Bitcoin as legal tender?
https://www.forbes.com/sites/lawrencewintermeyer/2021/08/05/could-developing-nations-follow-el-salvadors-move-to-bitcoin/?sh=e930afe28b70

They can but why would they?

Using bitcoin as a currency is not practical and businesses can already accept bitcoin if that's what they want. They don't need their government's approval. That's the whole point of cryptocurrencies. You don't really need permission from anybody to use them.

I also don't think bitcoin can handle that much demand. The fees would rise and the network would become unusable.

[Lucius]

Since El Salvador became the first country to approve Bitcoin as a legal tender, it has become international news and has attracted attention from the market, especially the cryptocurrency market. Many countries are paying close attention to this big move.

I have to correct you, many poor third-world countries that are looking for a way out of debt bondage into which they have been put by the IMF and the World Bank so that they can control them more easily. As I wrote before, a country that has neither its own currency has no choice but to experiment with Bitcoin.

Using Bitcoin in El Salvador can bring meaningful social benefits to many people who do not have a bank account and cannot access basic financial services. People can benefit from the potential of low-cost remittances and durable savings accounts that are not affected by money supply expansion and hyperinflation. And with the advent of the Lightning Network, using Bitcoin as a payment method has become more feasible.

The emphasis is mostly on foreign exchange remittances coming from the US, which are estimated at about $6 billion a year, and a way to avoid money transfer fees. Bitcoin on-chain transactions can sometimes be quite expensive and this cannot be a solution unless everyone uses LN which would then really allow for fast and cheap real-time money transfers.

However, you should know that Bitcoin is still just an option in addition to the USD, which is the official currency in that country, and that a legal tender only gives people the opportunity to use BTC, but does not force them to do so.

[sapnu]

I don't think it would be ideal for other countries regardless if it is a developing one or not to follow El Salvador's footstep right away. It would be best if they would first observe and analyze the function of bitcoin so that they may know if it can give their country an advantage or cause detrimental effects later on. It indeed made a huge noise around the world as El Salvador becomes the very first country to legalize bitcoin as a legal tender but the effects or the outcome of their decision cannot be visible yet and even other countries are surely observing over it right now or ever since they started it.

[sana54210]

With Bitcoin the longer you wait, the rewards will start to decrease. Countries at a disadvantage may consider taking measures as early as possible to give them an advantage over other larger economies. So will more countries follow El Salvador to use Bitcoin as legal tender?

This is a valid point but it is understandable only for the people who are aware of all the aspects of bitcoins; I mean countries who never bother about studying the basic economics of bitcoin may wait infinitely or until tier-1 countries stake their stand on bitcoin legality.

Anyhow, I am sure most counties must be doing both following how El Salvador  is economically doing and studying the pros and cons of adopting bitcoins. Unfortunately bitcoin is designed to benefit individuals and its pros are not government concerned. Hence, I am afraid what most countries will decide about the adoption bitcoin; moreover we can expect countries to accept bitcoin as a digital asset in extreme worst case.