The government of Tonga is reportedly planning to pass legislation that will make Bitcoin legal tender in the country. The former MP said the bill would help the country maintain its independence from foreign powers and protect it from a currency collapse that 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 introduced the bill says he wants more people to start using cryptocurrency.
On the path to bitcoinization, another domino is about to fall. The Pacific island nation of Tonga yesterday released a step-by-step explanation of their acceptance of Bitcoin (BTC) as legal cash.
An estimated time frame for Bitcoin’s approval as legal money in Tonga was provided by Lord Fusitu’a, a former MP for that country. The move, which follows El Salvador’s lead, has the potential to bring more than 100,000 Tongans into the Bitcoin network.
The President 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 submitted to parliament. Passed. 2. Handed over to the Palace Office to be presented to His Majesty for royal assent. 3.4. 2-3 Weeks Government Gazette; date of activation set. 4. #BTC becomes legal tender on the activation date. https://t.co/TNjQjeEbjN
January 12, 2022: Lord Fusitu’a (@LordFusitua)
The law is “modelled after and is very similar to El Salvador’s El Salvador Flag bill,” Fusitu’a said in a subsequent response.
Before the Tongan clarified the situation, the news had already sparked speculation, questions and sheer excitement on Bitcoin Twitter. He replied, “Boom!”, with great enthusiasm, saying that the timetable for BTC to become legal money could be as early as November or December of this year. Tweet: “That’s us, brother!”
It was widely believed that Tonga could be one of the countries to embrace Bitcoin as legal money in 2021. Speculation peaked after a podcast Lord Fusitu’a did with Bedford-based Bitcoiner Peter McCormack.
The former MP discussed the remittance argument for making legal bitcoin money during the discussion. He said adoption would lead to:
“A 30% increase in discretionary income. Some (people) will save that extra 30% instead of investing it in the economy or replenishing their savings.
The distant island of Tonga relies on money transfers from countries like Australia, New Zealand and the US. According to the International Finance Corporation, remittances in Tonga account for up to 30% of household income, more than any other country in the world.
The Tongan diaspora is huge, despite the Tongan population being only in the six digits. According to the International Organization for Migration, 126,000 Tongans live abroad, 18,000 of whom are in Australia.
One of the main reasons why El Salvador decided to accept bitcoin as legal cash was the use of wire transfers. The World Bank estimates that Tonga’s remittances as a percentage of GDP are much larger than El Salvador’s, at 39% versus 24%, respectively.
Related: El Salvador’s 2021 Bitcoin Law: The Beginning and the End
De Heer mentioned the domestic benefits of using the open source protocol in addition to money transfers. It’s “one of the few times when it’s an advantage to be a sparsely populated small-island archipelago,” he said, adding that Tonga could build a circular economy of BTC.
The Tongan claimed internet and smartphone usage reached 90% when the islands’ internet infrastructure was scrutinized. Tonga has an internet penetration rate of 50% according to the latest current data from the World Bank, albeit from 2017 five years ago.
Fusitu’a is excited about his country’s BTC future, even if it may take some time to bring the islands online:
a system where every step of the supply chain accepts bitcoin as payment. To the table of the seed. From the farmer’s supplier to the waitress who brings it to you at Kardo’s steak bar and every step in between, pay for cassava roots and livestock with bitcoin. https://t.co/oR48NGzTGm
January 13, 2022: Lord Fusitu’a (@LordFusitua)
The “Tonga Volcano” is a bill that was presented to the Tongan Parliament. The bill would make Bitcoin legal tender in the country.
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