Nayib Bukele isn’t joking when he predicted two more countries will make Bitcoin legal tender in 2022, deVere Group CEO Nigel Green said this week. In fact, he may have underestimated the number.
Over the weekend Bukele, the president of El Salvador, tweeted a series of predictions to his 3.2 million followers. His other guesses included Bitcoin reaching $100,000 before 2023
“I’m confident that the young, maverick President Nayib Bukele, is correct about other countries adopting Bitcoin as legal tender in 2022,” Green said. “But I would go further still than he did. I believe that it’s likely that three more nations will follow El Salvador’s pioneering, future-focused lead into the digital age.”
Green said poorer countries suffer from weak currencies that leave them vulnerable to market changes that can produce rampant inflation. That produces reliance on more stable currencies in the developed world. That practice has its problems, however.
“Reliance on another country’s currency also comes with its own set of, often very costly, problems,” Green explained. “A stronger U.S. dollar, for example, will weigh on emerging-market economic prospects, since developing countries have taken on so much dollar-denominated debt in the past decades.”
By adopting cryptocurrencies as legal tender, countries immediately have a currency that isn’t influenced by market conditions within their own economy, nor directly from just one other country’s economy, Green added. Because it operates on a global scale Bitcoin is impacted by wider, global economic changes. Cryptocurrencies can also help people and businesses who are often neglected by banks and financial service providers.
Following his tweet, Bukele’s Twitter followers began guessing which countries are most likely to adopt Bitcoin. They included Tonga, Turkey and Bolivia. Green shared other possibilities.
“Due to their similar reliance on remittances, amongst other factors, other countries, including Panama, Paraguay, Guatemala, and Honduras, could also adopt Bitcoin. Just after El Salvador’s adoption back in September, Panama announced a bill to make the cryptocurrency legal tender in the country. Also, Congressman Gabriel Silva tweeted that this could create jobs in Panama and lure investment from other nations.”
“A Paraguayan bill moving to regulate the trading and mining of Bitcoin and cryptocurrencies in the country passed the Senate last month. Is this the first step to making Bitcoin legal tender? The central banks of Honduras and Guatemala are both eying digital currencies too, according to officials, but they are – for now – taking a different approach.”
That plan includes studying the merits of central bank digital currencies, a step Green believes further cements the thought of the future of money being a digital one. Ultimately though Green believes their studies will end up with them embracing an existing cryptocurrency instead of creating their own from scratch.
“President Bukele is right,” Green concluded. “Other countries will indeed follow El Salvador’s example and make Bitcoin legal tender in 2022. How many remains unclear, of course. But when it happens, it will be a snowball effect.”