Another domino will fall in the way of bitcoinization. On Wednesday, a former MP from the Pacific island of Tonga shared a step-by-step approach to accepting bitcoin (BTC) as a legal tender.
In a series of tweets, Lord Fuzitwa, a former MP in Tonga, issued an ETA to convert bitcoin into a legal tender in Tonga. By copying the rules of the game in El Salvador, the move could see more than 100,000 tons on the Bitcoin network.
In his five-point plan, the president of the World Organization of Parliamentarians Against Corruption describes the path to adoption:
In a later comment, Fusitua said that the bill was “almost modeled according to El Salvador’s law”.
The announcement sowed the seeds of questions, predictions and direct applause from bitcoin twitter before the tongs fixed it all. He enthusiastically replied that the deadline for converting bitcoins into legal tender could be as early as November or December this year, and replied: “Boom! It’s us, brother!” in a tweet.
In 2021, many speculated that Tonga would be one of the next countries to accept BTC as a legal tender. Speculation came to a head after Lord Fausitva’s podcast with Peter McCormack from Bedford.
During the conversation, the then MP discussed the issue of money transfers in order to accept BTC as a legal tender. Acceptance will increase:
Increase consumption income by 30%. With the extra 30%, some (people) will save it instead of investing in the economy and saving. ”
Tonga is a remote island nation that relies on remittances from other countries, including Australia, New Zealand and the United States. International Finance Corporation estimates that Tonga generates more income from money transfers than any other country in the world, and accounts for up to 30% of a household’s income.
While the population of Tonga is only six digits, the Tongan diaspora is large. The International Organization for Migration estimates that the number of Tonga living abroad is around 126,000, of which 18,000 Tonga live in Australia.
The problem of using money transfers was one of the main reasons why El Salvador accepted BTC as a legal tender. According to the World Bank, Tonga’s remittances as a percentage of GDP are significantly higher than in El Salvador: 39% and 24% respectively.
Related topics: El Salvador: How it started and how it will happen with the Bitcoin law in 2021
Regardless of the transition, Lord talked about the local benefits of using an open source protocol. He agreed that Tonga could create a circular economy with BTC and that this is “one of the few cases where an archipelago with a small, sparsely populated archipelago would be an advantage.”
When the islands’ internet infrastructure was questioned, Tonga claimed that internet and smartphone penetration rates exceeded 90%. The latest data from the World Bank – albeit five years ago, in 2017 – show that the Internet penetration rate in Tonga is 50%.