Tonga to copy El Salvador bill making Bitcoin legal tender says former MP
Tonga’s government is reportedly set to pass legislation making Bitcoin legal tender in the country. The former Member of Parliament said this bill would help the nation maintain its independence from foreign powers, and protect it against a currency collapse which could undermine national monetary reserves.
The “tonga btc legal tender” is a bill that would make Bitcoin legal tender in the country of Tonga. The former MP who proposed the bill, says he wants to see more people using cryptocurrency.
On the path to bitcoinization, another domino is about to fall. The Pacific island country of Tonga released a step-by-step explanation of their adoption of Bitcoin (BTC) as legal cash yesterday.
An estimated time frame for the adoption of Bitcoin as legal cash in Tonga was provided by Lord Fusitu’a, a former member of parliament for that nation. The action, which follows El Salvador’s lead, has the potential to bring more than 100,000 Tongans into the Bitcoin network.
The Chairman of the Global Organization of Parliamentarians Against Corruption (GOPAC) outlines the adoption process in his five-point strategy as follows:
The Sept./Oct. Bill is presented to Parliament. Passed. 2. Delivered to the Palace Office to be presented to His Majesty for royal approval. 3.4. 2-3 Weeks government gazette; date of activation set. 4. #BTC becomes legal tender on the activation date. https://t.co/TNjQjeEbjN
12 January 2022: Lord Fusitu’a (@LordFusitua)
The law is “modeled on and is virtually similar to the El Salvador Flag of El Salvador bill,” Fusitu’a said in a subsequent reply.
Before the Tongan clarified the situation, the news had already sparked speculation, inquiries, and sheer excitement on Bitcoin Twitter. He responded, “Boom! “, with much enthusiasm, saying that the timescale for BTC becoming legal money might happen as early as November or December this year. Tweet: “That’s us, brother!”
It was commonly believed that Tonga may be one of the nations to embrace Bitcoin as legal money in 2021. Following a podcast that Lord Fusitu’a did with Bedford-based Bitcoiner Peter McCormack, speculation reached a fever pitch.
The former member of parliament discussed the remittance argument for making bitcoin legal money throughout the discussion. He said that adoption would cause:
“A 30% rise in discretionary income. Some (people) will save that additional 30% rather than invest it in the economy or add to their savings.
The distant island country of Tonga depends on remittances from nations like Australia, New Zealand, and the US. Remittances are thought to make for up to 30% of family income in Tonga, more than any other nation in the world, according to the International Finance Corporation.
The Tongan diaspora is enormous despite the fact that the Tongan population is only in the six figures. 126,000 Tongans are thought to be residing overseas, with up to 18,000 of them in Australia, according to the International Organization for Migration.
One of the main reasons why El Salvador decided to accept bitcoin as legal cash was the remittance use case. The World Bank estimates that Tonga’s remittances as a proportion of GDP are much larger than El Salvador’s, at 39% vs. 24%, respectively.
Related: El Salvador’s 2021 Bitcoin Law: The beginning and the end
The Lord mentioned domestic benefits of using the open-source protocol in addition to remittance. It’s “one of the rare times where being a sparsely inhabited little island kingdom archipelago is a benefit,” he said, adding that Tonga could establish a BTC circular economy.
The Tongan claimed internet and smartphone usage rates topped 90% when the islands’ internet infrastructure came under scrutiny. Tonga has a 50% internet penetration rate according to the latest current data from the World Bank, although from 2017 five years ago.
Fusitu’a is enthusiastic in the BTC future of his nation, even if bringing the islands online may take some time:
a system where every step of the supply chain accepts bitcoin as payment. To the table from the seed. From the farmer supplier to the waitress bringing it to you at Kardo’s steak bar and every step in between, pay for cassava roots and cattle with bitcoin. https://t.co/oR48NGzTGm
13 January 2022: Lord Fusitu’a (@LordFusitua)
The “tonga volcano” is a bill that was introduced to the Tongan parliament. The bill would make Bitcoin legal tender in the country.