In a trend that was started by El Salvador's President, Nayib Bukele, politicians from several Latin American countries have begun calling for the adoption of Bitcoin as legal tender. The interest in Bitcoin seems to be motivated by inflation, the reliance on the U.S. dollar and a way to attract tech entrepreneurship.
Don’t miss out on how smart money is playing the crypto game. Subscribe to our premium newsletter - Crypto Investor.
"In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy," said President Bukele.
The people of El Salvador have already begun utilizing Bitcoin as a means of wealth storage and payments. The movement has been galvanized by Jack Mallers, the creator of the Zap and the Strike Bitcoin payments app. He has also helped to create a bill to make Bitcoin legal tender in the country.
The transition to legal tender removes capital gains from the equation and allows people to move and convert Bitcoin without worrying about taxes.
“As of now, El Salvador is set to be the first bitcoin country and the first country to make bitcoin legal tender and treat it as a world currency and have bitcoin on their reserves," said Mallers during the 2021 Bitcoin conference in Miami.
El Salvador officially adopted Bitcoin as legal tender on June 9, 2021, making it the first country to do so.
What followed the announcement from El Salvador was a flurry of politicians and leaders from across various Latin American countries calling for the same type of action with the same motivation — to reduce the reliance on the dollar, slow inflation, increase financial inclusion and bring in more entrepreneurs.
Another obvious motive is could be fear of missing out. While the populations of Latin American countries are generally small, a handful of them adopting Bitcoin and even buying Bitcoin with reserves would likely increase their wealth, not to mention the money that would stream in from crypto-businesses looking to establish themselves in a crypto-forward country with lower taxes.
The first Latin American politician outside of El Salvador to express interest was Congressman Carlitos Rejala of Paraguay. In a tweet, the leader called for the nation to advance along with its new generation. The Congressman even added a new photo with laser eyes on Twitter.
Rejala also announced that he would be presenting a bill to make Bitcoin legal tender in Paraguay to Congress within the month. He also said that the country should use its hydroelectric capabilities to mine Bitcoin.
Next, a politician from Panama shared similar comments on Twitter after hearing about the movement in El Salvador. Congressman Gabriel Silva said that Panama cannot be left behind and that he plans to propose similar action.
"This is important. And Panama cannot be left behind. If we want to be a true technology and entrepreneurship hub, we have to support cryptocurrencies We will be preparing a proposal to present at the Assembly. If you are interested in building it, you can contact me," said Silva.
Fabio Ostermann, a State Deputy for Rio Grande do Sul of Brazil, joined in with laser eyes on Twitter and also retweeted a post from the popular Bitcoin account, Documenting Bitcoin. The Documenting Bitcoin post said that Ostermann had added laser eyes indicating support for Bitcoin.
Another Federal Deputy of Brazil, Gilson Marques, made a new laser eyes profile picture with the hashtags #Bitcoin and #ToTheMoon. Marques also said he was the first deputy of Brazil to say "tax is theft" in the Chamber of Deputies.
Senator Indira Kempis de I. of Mexico added laser eyes to her profile on Twitter and shared some Bitcoin-related posts in a show of support. She also retweeted Tyler Winklevoss who said, "First they ignore you, then suddenly Paraguay, Argentina, Panama, Brazi, El Salvador, and Nicaragua embrace #Bitcoin."
Kempis also retweeted a Tweet from writer Derek Ross who said, "Mexico has joined Latin America in the #Bitcoin journey. Hopefully, @IndiraKempis follows through with her laser eyes and helps introduce legislature to bring the Bitcoin standard to Mexico. Thank you for starting this revolution @nayibbukele. Very exciting time are ahead."
The National Deputy for Neuquén, Argentina, Francisco Sánchez, also added laser eyes as well and said, "I can't believe it, but this is how it is."
Is Latin America Adopting Bitcoin?
It's too early to tell how much merit this trend has. Right now, the only country that has made significant strides toward Bitcoin adoption is El Salvador, which is said to be sending a bill to Congress this week.
Unlike President Bukele of El Salvador, the politicians on this list all come from different countries and only represent the constituents of the region they were elected in. But the trend could speak to a larger want from the people that these politicians represent.
Perhaps even more powerful a motive is fear of missing out. Should El Salvador successfully adopt Bitcoin and have an economic benefit to show for it, other countries may find it irresistible. This benefit could come in the form of increased wealth from Bitcoin ownership in the country or a growth in the tech industry from tax incentives related to cryptocurrency.
So far, none of these countries have actually adopted Bitcoin as legal tender, but it is certainly a trend to pay attention to. As the first countries to start talking about this, they represent the guinea pigs of the Bitcoin experiment as a true currency in a nation.