Tongan Parliament May Propose Recognizing Bitcoin as Legal Money

Kavya  |  Oct 5, 2021

A Tongan legislator, MP Lord Fusitu'a, has proposed legislation for recognizing Bitcoin as legal money in Tonga.

Tongan May Follow El Salvador In Recognizing Bitcoin As Legal Money

In an interview with Financial Review, Fusitu'a stated that an El Salvador-style Bitcoin bill will be submitted to the country's parliament in May 2022.

Fusitu'a stated that his country might profit from recognizing Bitcoin as legal money alongside the Tongan Pa'anga, the present official currency.

The lawmaker initially indicated an interest in Bitcoin in mid-2021, however, his attention was restricted to making investments in the asset class at the time.

The legislation would require significant support from other Tongan lawmakers, as well as the country's central bank, from the time it is drafted until the time it is passed.

Tonga, If Successful, Would Join El Salvador In Recognizing Bitcoin Earlier This Year

Tonga has a population of little more than 100,000 people and a GDP of over $500 million as of 2020. Despite being a small Pacific Island nation, Tonga may pave the way for other Pacific Island nations to follow in its footsteps in embracing the decentralized asset.

Incoming overseas remittances account for a significant percentage of Tonga's GDP, and Lord Fusitu'a believes that by embracing Bitcoin, the island nation would be able to enhance its cross-border payment system.

El Salvador made history in September when it became the first country to make Bitcoin legal money.

El Salvador's Introduction Of Bitcoin Has Been Met With Criticism And Riots

Some see the legalization of Bitcoin in El Salvador as a watershed moment, indicating that cryptocurrencies like Bitcoin and Ethereum are becoming a key component of the global financial system.

El Salvador, on the other hand, has been heavily chastised for adopting Bitcoin as their official national money. President Nayib Bukele, who oversaw the Bitcoin bill, was also met with many objections from local political groups over the country's monetary shift.

 

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