Bitcoin Adoption: Who Will Do Better Among El Salvador, Tonga, and Brazil?

On the hill of El Salvador’s widely-celebrated Bitcoin adoption, Brazil is set to follow suit and become the second nation in the world to put Bitcoin on its balance sheets. Aureo Ribeiro, Brazil’s Federal Deputy Chief made the announcement yesterday, stating that the process of Bitcoin adoption has only the final hurdle of a majority plenary approval to cross before it becomes signed into law.

Expressing optimism, Ribeiro said, “we want to separate the wheat from the chaff, create regulations so that you can trade, know where you’re buying and know who you’re dealing with.” Ultimately, with the new bitcoin development, “Brazilians could soon be able to buy a house, a car, [and even] go to McDonald’s to buy a hamburger,” remarked Ribeiro.

With Adoption Comes Regulation

Unlike El Salvador, however, Brazil is looking to leave no regulatory stone unturned before it accepts Bitcoin. A reminiscence of the Rio de Janeiro crypto scam which ripped over 250,000 Brazilians of their hard-earned savings, has forced the country’s lawmakers to ensure all necessary laws are in place to discourage any form of fraud.

Convicted crypto fraudsters will now face anywhere from four years to sixteen years of jail time, and are liable to forfeit over 65% of their total lots.

Tonga Also Set To Tango

As recent news has shown, Brazil is not the only nation nursing the feeling of economic optimism that can come with adopting Bitcoin. The far-away Polynesian Island of Tonga is also set to grant a legal tender status to Bitcoin alongside its Pa’anga currency.

As an economy heavily reliant on repatriated funds, chief among the growing reasons for the legalization of Bitcoin is the exorbitant fees charged by global payments giant, Western Union, for home remittances. To this, Lord Fusitu’a, a prominent Tongan crypto advocate, who reported over $60billion in annual losses to Western Union remittance charges, is eager to get a seal of approval from the parliament by mid-year 2022.

Macro worries

While El Salvador and Tonga, benchmark their focus for adoption on improving their GDP and attracting unhindered investment, Brazil has opted to ply the more cautious route, setting up water-tight regulations to ensure it does not become overrun by lawless financial crypto scams once it opens its borders to legal adoption.

These nations will now have to deal with a plethora of global fiat financial regulatory authorities like the IMF and the World Bank which constantly try to tie crypto to terrorist funding, money laundering, and other scam activities. 

The IMF recently proposed government-backed CBDCs as a solution to countering growing cryptocurrency adoption in most countries but Brazil already has close to 50% of its population in support of Bitcoin.