Domino Effect: Which Countries Will Adopt Bitcoin Next?

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Both El Salvador and Paraguay have signaled their pro-Bitcoin intent. But as pointed out by @GaryLeland, Brazil and Panama have also declared an interest in following suit.

This then begs the question, which other countries also intend to adopt Bitcoin? More so, given the mainstream aversion to the leading cryptocurrency, why is this happening?

Could El Salvador Be The First Country To Formally Adopt Bitcoin?

The President of El Salvador, Nayib Bukele, dropped a bombshell on Saturday after he said he would introduce a bill to Congress this week for the formal adoption of Bitcoin as a legal tender.

If successful, El Salvador would be the first country to officially use the cryptocurrency to attract investment and enable more residents to participate in the formal economy.

This was soon accompanied by a tweet from Bukele doubling down with no capital gains tax on Bitcoin and immediate permanent residency for crypto entrepreneurs.

https://twitter.com/nayibbukele/status/1401622548396314631

The comments were flooded by crypto enthusiasts, including Binance CEO Changpeng Zhao, indicating their approval and expressing an interest in moving there.

Bukele has come forward to say his reasons for endorsing Bitcoin are many. But ultimately, it comes down to improving economic prosperity and financial inclusion in a country where 70% of people do not have access to banking or credit.

Remarkably, 20% of El Salvador’s GDP comes from money sent home from migrants. This brings additional struggles with international transfer fees and legacy inefficiencies, which sometimes means it takes days for funds to clear.

There Are Consequences To Dollar Printing

Another reason for El Salvador’s Bitcoin stance comes from the Fed’s money-printing policy, which has been rampant over the last year or so.

“the U.S. Federal Reserve has dramatically expanded the supply of circulating U.S. dollars, as measured by the M2 money stock, from $15.35 trillion in February 2020 to $20.26 trillion in May 2021. That’s an increase of 32 percent, unprecedented in modern peacetime U.S. history.”

Based on all of the countries signaling their pro-Bitcoin stance in recent days, there is clearly a Latin American theme going on.

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