Tonga will probably be the next country to make Bitcoin legal tender

[nullama]

It has been 3 months since El Salvador made history by making Bitcoin legal tender in their country, alongside the USD(September 7th, 2021).

The world has reacted in different ways. For example, the International Monetary Fund (IMF) has recommended El Salvador to not use Bitcoin as a legal tender:

"Given bitcoin’s high price volatility, its use as a legal tender entails significant risks to consumer protection, financial integrity, and financial stability. Its use also gives rise to fiscal contingent liabilities. Because of those risks, bitcoin should not be used as a legal tender."

Other countries are starting to think about making the same move that El Salvador just did, such as Paraguay, and many others. The main motivations behind this are high fees of remittances, increasing inflation, and not having access to traditional banks. After reading a bit more in detail about the actual situation in each country I realized some countries are not really putting any actual laws into parliament, others are considering using different cryptos, etc. I think Tonga is probably the closest to actually achieve Bitcoin as a legal tender:

"Tonga’s Parliamentary Representative Wants Bitcoin To Become Legal Tender"

People in this small island use Western Union for remittances, and they have to pay up to 30% in fees. Making Bitcoin legal tender, alongside the Tongan Pa’anga, would immediately help people save a lot in money transfers. MP Lord Fusitu’a will be presenting a Bitcoin bill, similar to the one from El Salvador, to the Parliament of the Kingdom of Tonga by May 2022. We will have to wait and see if it passes.

[Darker45]

Pending the passing of the law that will hopefully make Bitcoin a legal tender of the beautiful yet isolated kingdom of Tonga, why doesn't the government just declare Bitcoin as an acceptable currency? I guess a mere executive order or something like that would be enough to make the ball rolling for this tiny country.

I think this Bitcoin-as-a-legal-tender experiment would be much easier to manage and probably faster to earn success in this very small Polynesian island nation than in El Salvador considering that Tonga is very small both in area and population.

The biggest challenge, however, would be technological and basic infrastructures that would provide the population reliable electricity and internet connection as well as the access to smart phones. This is particularly more challenging because the country is archipelagic and that a number of small inhabited islands are living off the grid.

[nullama]

Pending the passing of the law that will hopefully make Bitcoin a legal tender of the beautiful yet isolated kingdom of Tonga, why doesn't the government just declare Bitcoin as an acceptable currency? I guess a mere executive order or something like that would be enough to make the ball rolling for this tiny country.

I think this Bitcoin-as-a-legal-tender experiment would be much easier to manage and probably faster to earn success in this very small Polynesian island nation than in El Salvador considering that Tonga is very small both in area and population.

The biggest challenge, however, would be technological and basic infrastructures that would provide the population reliable electricity and internet connection as well as the access to smart phones. This is particularly more challenging because the country is archipelagic and that a number of small inhabited islands are living off the grid.

That's a good point.

In 2019 Tonga didn't have Internet access for a couple of weeks because one underwater cable was damaged. On the positive side, that same year the government started to prepare a satellite internet connection to provide internet access to most of the islands of the kingdom.

Also something to note, even though there are hundreds of islands in Tonga, about 70% of the population live on the main island.

[kryptqnick]

Given that the article is based on thoughts of one Tonga MP, I think it's not particularly likely that they'll make Bitcoin legal tender there. I looked up the information about their economy, and it's not doing well, so they might consider taking a risk, similarly to what El Salvador did, but there we saw a strong hand of a young dictator (president), whereas here it's only words of an MP for now. Also, Internet penetration is at 40% there, which seems lower than in El Salvador which has around 50% penetration. Maybe it's not a huge difference, but the majority not having internet access sounds problematic for adoption of Bitcoin to me.

[Hydrogen]

I wonder what the economic impact of investors and finance demographics immigrating from the united states to the carribean, puerto rico and regions with more crypto friendly regulation is.

What is the opposite of capital flight? I think el salvador might have a clue on this. Smaller nations like tonga may not. It would be very interesting to know what percentage of residents are aware of the western union fees they pay in contrast to fees, the rest of the world. Or even fees bitcoin users might expect to pay.

Around 2007, I visited an island which mostly lacked internet support. There was an internet cafe there which charged $60 an hour to use the internet. Tonga's native internet infrastructure could be better or worse than this precedent.

Pending the passing of the law that will hopefully make Bitcoin a legal tender of the beautiful yet isolated kingdom of Tonga, why doesn't the government just declare Bitcoin as an acceptable currency? I guess a mere executive order or something like that would be enough to make the ball rolling for this tiny country.

To answer that, it may help to remember the era from 2016 to 2020 when Donald Trump was called a dictator due to him issuing executive orders.

Apparently, that type of behavior is...  what dictators do?    

Is that how it works?

[Lucius]

If we take into account the political support that Bitcoin had in El Salvador, and compare it with Tonga - then it is a huge difference, because this is a member of parliament who has a proposal that is completely unknown how it will be accepted by parliament, government and all who should agree with that proposal. What's interesting is that Strike is included in the story again, and that Bitcoin can become a way to transfer money even if Bitcoin is not a legal tender.

Strike enables residents of this nation to send money transactions practically for free through the Lighting Network. Thus, broad adoption of the app can be a tremendous benefit to Tonga’s economic development. Additionally, Strike may not need the government or central bank of Tonga’s permission. This is a purely business arrangement.

[fiulpro]

According to the news the MP decided it would be a good idea to make bitcoins legal tender back in November, starting of the month. But we have not yet received anything regarding that matter which does mean that, it's not that solid right now.

It would not need just one MP but many taking the vote therefore we can just hope. But then again the parliament member decided that it would be a good idea to do it in 2022 which does mean that we have to still wait a lot.

What we can see is that small countries are more accepting towards cryptocurrencies like bitcoins. Big countries, I doubt it. US was already taking major hits and UK is also bothered about the Bitcoin gambling sites corrupting the politicians. I do think it would make a major impact once most of the countries do that, especially the strong ones. I think Ukraine must be close to thinking about it in that direction as well.

[aoluain]

For the population there and for nationals abroad there is an obvious benefit
to them by saving on the cost of transferring funds to an from the island,
this was also one of the key reasons El Salvador adopted Bitcoin.

Even if you didnt want to fully adopt Bitcoin on a personal level, ditching Western
Union for Bitcoin is a no-brainer.

[South Park]

Pending the passing of the law that will hopefully make Bitcoin a legal tender of the beautiful yet isolated kingdom of Tonga, why doesn't the government just declare Bitcoin as an acceptable currency? I guess a mere executive order or something like that would be enough to make the ball rolling for this tiny country.

I think this Bitcoin-as-a-legal-tender experiment would be much easier to manage and probably faster to earn success in this very small Polynesian island nation than in El Salvador considering that Tonga is very small both in area and population.

The biggest challenge, however, would be technological and basic infrastructures that would provide the population reliable electricity and internet connection as well as the access to smart phones. This is particularly more challenging because the country is archipelagic and that a number of small inhabited islands are living off the grid.

If those are the proper channels on Tonga then it is better that it is done this way even if it takes longer, after all if whoever is the head of state there did something like that what is stopping the next head of state of turning back that decision? It is better that this is talked about and voted by the representatives of the country, after all having to pay 30% on fees for a remittance service is ridiculous when bitcoin can probably offer better performance for any transaction above 10 dollars or so.

[Hamphser]

When El Salvador did make the first move then it did really give out some insights on other countries which are suffering on some problems like this

money remittance huge deductions and i couldnt really blame them off if there would be some probability that they would go for a change which Bitcoin

could give.If El Salvador did able to do so then why cant they? Any news something connected to this is always a positive one.

[Darker45]

Pending the passing of the law that will hopefully make Bitcoin a legal tender of the beautiful yet isolated kingdom of Tonga, why doesn't the government just declare Bitcoin as an acceptable currency? I guess a mere executive order or something like that would be enough to make the ball rolling for this tiny country.

To answer that, it may help to remember the era from 2016 to 2020 when Donald Trump was called a dictator due to him issuing executive orders.

Apparently, that type of behavior is...  what dictators do?    

Is that how it works?

Perhaps we should differentiate a direct abuse of power and the mere use of what's legally provided for by the constitution. Executive order is there made available as a legal means to issue policies. At the end of the day, an executive order does not really give order to the country's population.

In the case of Tonga, an executive order doesn't really order each and every Tongan to accept Bitcoin. I think it will only order executive agencies of the government to allow transactions made in Bitcoin. I was just thinking this is a convenient way to provide the people the alternative, a cheaper and more convenient one at that, while the actual bill is yet to be filed, deliberated upon, reviewed and hopefully approved.

[mu_enrico]

Legal tender means people MUST pay with Bitcoin, and that I disagree. I agree with a simple law that states people can freely use Bitcoin as cash or whatever means of payment. People should be free to use what currency they want to use or reject, but that's only exists in an imaginary country... Well, I'd like to see what the law really said before making further comment.

[RealMalatesta]

According to the news the MP decided it would be a good idea to make bitcoins legal tender back in November, starting of the month. But we have not yet received anything regarding that matter which does mean that, it's not that solid right now.

It would not need just one MP but many taking the vote therefore we can just hope. But then again the parliament member decided that it would be a good idea to do it in 2022 which does mean that we have to still wait a lot.

I would say that it all starts with one MP, then it would get bigger and bigger and bigger. Why do you think politicians end up taking a stance on some policies all of a sudden? Something that wasn't talked for decades, suddenly becomes a very big talking point? That is because if the MP that says something ends up getting a ton of votes, that usually results with a great deal of other MP's to change their view in order to get more votes as well. That is what we are talking about here, we want to see people get a great deal of profit with the help of their government and politicians will realize supporting this will get them votes.

I have to be honest I never heard of Tonga before, but I believe that wherever that place is, the same logic of getting popular equals more love from voters probably is still the same with every other nation in the world.

[oHnK]

Honestly, I just read about the country namely Tonga. So after searching on the internet that the data shows us that the condition of people is suitable to implemented crypto as legal tender. Crypto has various advantages that can meet their needs such as easy access, cheap and can improve the welfare of its people through convenience and comfort.

[lixer]

Honestly, I just read about the country namely Tonga. So after searching on the internet that the data shows us that the condition of people is suitable to implemented crypto as legal tender. Crypto has various advantages that can meet their needs such as easy access, cheap and can improve the welfare of its people through convenience and comfort.

Yeah, I also have never heard of this name before, this is my very first time of getting to know about this, that there is a country that goes by that name. That’s quite nice, and also getting to know that they are interested in Bitcoin is something else. Really nice how there are countries that are now looking forward to adopt Bitcoin as a legal, although I know that it is not going to be that way for every country, but at least there are some that values it that much, and it makes me quite happy.

Everything has their own choice, and some has chosen to create their own digital currencies, which is not bad; all were inspired by bitcoin, because if there wasn’t bitcoin in the first place, there wouldn’t be any digital currency. So when you look at the history, it’s still all about BTC.

[Taskford]

Honestly, I just read about the country namely Tonga. So after searching on the internet that the data shows us that the condition of people is suitable to implemented crypto as legal tender. Crypto has various advantages that can meet their needs such as easy access, cheap and can improve the welfare of its people through convenience and comfort.

They are somewhat a good country to implement this since they are open on various opportunities which can help them boost their economy. Provably this will be the best option they do if they fully implement this plan and once they totally make bitcoin as their legal tender for sure the two countries announce it will be lucky if more countries will also do it since for sure the price will boost up and so lucky for them to buy at good rate. This could also help their people in economical aspect or in their digital transaction since we know bitcoin gives both convenience and opportunity.

[batang_bitcoin]

Didn't know that they're paying that much fee for transfers using Western Union. Well, if they're already on the plans of making it as a legal tender, that's an absolute delight to them and that's a lot of money that they can save. These remittances are taking advantage of the people probably not only from Tonga but also in other small countries that don't have much competition for their service.

[CaVO32]

Honestly, I just read about the country namely Tonga. So after searching on the internet that the data shows us that the condition of people is suitable to implemented crypto as legal tender. Crypto has various advantages that can meet their needs such as easy access, cheap and can improve the welfare of its people through convenience and comfort.

They are somewhat a good country to implement this since they are open on various opportunities which can help them boost their economy. Provably this will be the best option they do if they fully implement this plan and once they totally make bitcoin as their legal tender for sure the two countries announce it will be lucky if more countries will also do it since for sure the price will boost up and so lucky for them to buy at good rate. This could also help their people in economical aspect or in their digital transaction since we know bitcoin gives both convenience and opportunity.

Not only if they are open to this concept but because they have small population and you can easily implement this switch of financial system. If in general, this move will be favorable on them, I guess, it now depends on their government officials if they will follow the path of El Salvador. And the good thing here is that with small population, it would be easier to implement this system. So let's wait if indeed the Tongans can enjoy the benefits of being crypto-dominated country.

[Sithara007]

This should have been done long back. I don't even understand the point in these Pacific microstates having their own currency. The cost of printing the banknotes may carve up a sizable fraction of the GDP. Either they should use a decentralized currency such as Bitcoin, or they should go for some foreign currency such as the AUD or the USD. I checked the historical exchange rates of Tongan Pa’anga, and I noticed that it is very stable. But still, the central bank maybe spending a lot of resources in maintaining stability in exchange rate.

[Lucius]

This should have been done long back. I don't even understand the point in these Pacific microstates having their own currency.

Every country that cares about its sovereignty and national identity needs a national currency - and I would dare to say that every country that does not have a national currency has a big problem because it depends on the currency of another country. El Salvador is a good example because they were completely dependent on US $, and now they have decided to try Bitcoin because they have nothing to lose.

The importance of having a national currency is best illustrated by the example of the EU and the crisis that began in 2007-2008. While the UK immediately took the necessary measures because it was outside the eurozone, the rest of the EU did virtually nothing until 2015 and everyone more or less shared the same fate.

Since the European Central Bank (ECB) sets the economic and monetary policies for all eurozone nations, there is no independence for an individual state to craft policies tailored for its own conditions.

The UK, a prior EU member, may have managed to recover from the 2007-2008 financial crisis by quickly cutting domestic interest rates in October of 2008 and initiating a quantitative easing program in March of 2009. In contrast, the European Central Bank waited until 2015 to start its quantitative easing program (creating money to buy government bonds to spur the economy).