Bitcoin has reached the legal tender stage where countries have begun to show interest in adding BTC to their state treasury and El Salvador has become the first state to do so as we have already mentioned in one of ours. previous article.
Country president Nayib Bukele took to Twitter to announce the news and even revealed that citizens will not have to pay any capital gains tax on Bitcoin as it is now legal tender. The president also changed his Twitter profile picture to show laser eyes, a popular ongoing meme trend for Bitcoiners.
Just a day after the announcement made by the president of El Salvador, another country hinted to join the Bitcoin league, we are talking about another country in South America, namely Paraguay. A politician from the country also changed his profile photo to show laser eyes and revealed that a big announcement will come this week suggesting a possible adoption of Bitcoin as legal tender.
Why are countries turning to Bitcoin now?
Retail investors triggered the cryptocurrency rally in 2017, while institutions watched from the sidelines.. This is because they weren't sure if BTC was reliable, but they believed it was just another internet bubble or something people could invest in. The 2021 bull run proved that Bitcoin is a true store of value and is here to stay. Realizing all of this, institutions rushed to jump on the Bitcoin bandwagon, followed by the publicly traded Fortune 500 companies adding Bitcoin to their treasury.
Now countries like El Salvador and Paraguay have realized that Bitcoin offers censorship-resistant money that would not only help them see their county's GDP growth.
El Salvador could play a similar role to Microstrategy and initiate a domino effect for other countries to join the Bitcoin bandwagon. The main reason these countries are turning to Bitcoin is the depletion of the value of the US dollar. This may not be a big deal for the US in the short term as it can print whatever it needs, but many other small nations suffer greatly from this problem.
Words of comfort for the community
The president of El Salvador explained that Bitcoin would prove to be a boon to the country as a legal tender as it offers financial inclusiveness and the fact that 70% of the country's population has no banks. He explained that: 70% of the population of El Salvador does not have a bank account and works in the informal economy.
Financial inclusion is not only a moral imperative, but also a way to grow the country's economy by providing access to credit, savings, investments and secure transactions.