Experts predict that three more countries will make Bitcoin legal tender this year
El Salvador took the plunge in September.
According to one expert, three other countries could do the same in 2022.
El Salvador made history by making Bitcoin (BTC) legal tender within its borders in 2021.
Its authoritarian president, Nayib Bukele,
tweeted this week that he expects two more countries to follow suit in 2022.
However, he is not the only one who believes this, with finance expert
deVere Group chief Nigel Green agreeing with the eccentric Central American leader.
"I'd go even further than he did," Green said.
"I believe that three more countries will likely follow El Salvador's pioneering,
future-focused lead into the digital age."
Bitcoin has the potential to replace the US dollar as a stable currency.
For decades, citizens in developing countries have used the US dollar as a stable currency,
as opposed to local fiat, which can change dramatically in value overnight.
However, Green pointed out that this practise can have unintended consequences.
"Reliance on another country's currency also brings its own set of,
often very costly, problems," he explained.
"A stronger US dollar, for example, will weigh on emerging-market economic prospects, given
that developing countries have accumulated so much dollar-denominated debt in recent decades."
It's no surprise that low-income countries
would consider adopting Bitcoin as a limited-supply international currency.
"By adopting cryptocurrency as legal tender, these countries instantly
have a currency that isn't influenced by market conditions within their own economy,
nor directly by the economy of just one other country," Green explained.
"Because Bitcoin operates on a global scale, it is influenced by broader, global economic changes."
Which countries are likely to make the leap in 2022?
Green named several candidates who could help
Bitcoin achieve legal tender status in the coming months.
They are all in El Salvador's neighbourhood: Panama, Paraguay, Guatemala, and Honduras.
"Panama announced a bill to make cryptocurrency legal tender
in the country shortly after El Salvador's adoption back in September," Green explained.
"Congressman Gabriel Silva also tweeted that this could lead to job creation in Panama
and attract investment from other countries."
A bill to regulate cryptocurrency trading and mining was recently passed in Paraguay.
"Does this represent the first step towards making Bitcoin legal tender?"
Honduras and Guatemala, according to Green,
are currently investigating central bank digital currencies.
"However, I believe they will eventually accept an
existing cryptocurrency as legal tender, as El Salvador has."
Green believes that once the second and third countries follow El Salvador's lead,
there will be a "snowball effect" for legal tender adoption around the world.
Bitcoin to reach $100,000?
Bukele also predicted that Bitcoin would reach $100,000 in 2022 in his English-language tweet.
On Tuesday afternoon, Australian time, it was worth US$46,199.
He also predicted that Bitcoin would "become a major election
issue" in the United States during the midterm elections later this year.
Many people in developing countries do not have
bank accounts because they are wary of untrustworthy financial institutions.
Cryptocurrencies, according to Green,
could help those economies "boost financial inclusion for individuals and businesses."
"I am confident that the young, daring President, Nayib Bukele,
is correct in his prediction that other countries will accept Bitcoin as legal tender in 2022."
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