After El Salvador, Tongan Parliament could consider Bitcoin as legal tender

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Key takeaways A Tongan politician is proposing legislation to make Bitcoin legal tender in the island nation. If successful, Tonga would follow El Salvador’s adoption of the cryptocurrency earlier this year. The adoption of Bitcoin has been the subject of criticism and protests in El Salvador, and its adoption in Tonga could face a difficult path to follow. Share this article

Tonga politician struggles to draft bill to make bitcoin legal tender in Tonga.

Tonga could follow El Salvador in adopting Bitcoin

Tongan MP Lord Fusitu’a drafts a bill to make Bitcoin legal tender in Tonga.

In an interview with Financial Review, Fusitu’a revealed that a Salvadoran-style Bitcoin bill will be presented to the country’s parliament in May 2022.

Fusitu’a said his country would benefit from making Bitcoin legal tender alongside the existing national currency, Tongan Pa’anga.

The politician first expressed interest in Bitcoin in mid-2021, although at that time his interest was limited to investing in the asset class.

From the drafting of the law to its passage, the legislation would require considerable support from other Tongan politicians, as well as the country’s central bank.

Tonga has a population of just over 100,000 and a GDP of around $ 500 million in 2020. Despite being a small Pacific island country, Tonga could potentially lead the way. to other Pacific Islands to follow its path in embracing the decentralized asset.

Incoming foreign remittances make up a large part of Tonga’s GDP, and by adopting Bitcoin, the island nation could improve its cross-border payment system, Lord Fusitu’a said.

In September, El Salvador made history by becoming the first country to make Bitcoin legal tender.

The legal adoption of Bitcoin in El Salvador is seen by some as a tipping point signaling that cryptocurrencies, such as Bitcoin and Ethereum, are starting to become an essential part of the global financial system.

However, El Salvador’s decision to adopt Bitcoin as the official state currency has been heavily criticized. President Nayib Bukele, who oversaw the Bitcoin law, also faced several protests from national political parties against the country’s currency change.

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