Bitcoin legal tender in 2022?

Slowly but surely more is becoming clear about Tonga’s plans. They want to follow El Salvador to turn bitcoin into a legal tender.

Bitcoin and Tonga

Tonga is an archipelago In the middle Nowhere. It is a kingdom in Polynesia with 169 islands inhabited by 36 people. The total area of ​​the archipelago is about 750 square kilometers. It is located in the eastern Pacific Ocean off Australia.

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It should be clear: the population is far from the rest of the world. As a result, they also benefit from digital and efficient payment methods. Former MP Lord Fuchidua expresses himself as a supporter of bitcoin in Bitcoin. Is sharing now New details About land projects:

So it is said that there are some steps to take:

1. Fiat is currently converting international transactions in cash with Bitcoin through the Lightning network. This is already happening (on a small scale).
2. Bitcoin should become a legal tender just like El Salvador. However, this will not happen until June-July 2022. Parliament was then reopened. In August, they will visit the constituencies to finalize the terms next month.
3. After that, they could start bitcoin mining in the volcano in October 2022. Again a copy of the El Salvador show.

It all seems so slow and inconvenient. But make no mistake: Tonga is an archipelago that is geographically very fragmented and fragmented (and therefore undeveloped). In addition, it only has a population of over 100,000. Smaller than the average city in the Netherlands.

Banga and Bitcoin

The country’s own currency is the panga. It refers to the value of other international currencies. The currency basket consists of the Australian, New Zealand and US Dollars and the Japanese Yen.

International payments are very important to this distant country. Half of the country’s population (some parts of the year) live abroad, mainly in Australia, New Zealand and the United States. As a result, almost 40% Gross domestic product (GDP) comes from abroad.

Often these payments are expensive, slow and inefficient. Payment companies and banks do not want to do business with these remote islands. GDP in 2018 will be $ 0.488 billion or $ 488 million.

Fusitu’al previously shared more details About the situation:

“A member of parliament from Tonga plans to legislate to legalize bitcoin in the kingdom … Western Union will take 30% less money on average … but cut bitcoin intermediaries.”

According to frequently cited numbers, they lose $ 60 million a year to companies like Western Union. It accounts for 12% of GDP. Or the other way around: if everyone starts using bitcoin, GDP will suddenly increase by about 10%.

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