More BTC Adoption in Latin America is Right Around the Corner!

More BTC Adoption in Latin America is Right Around the Corner!

Since the inception of Bitcoin, it has been theorized by many economists that the adoption of cryptocurrency by one government would quickly lead to the adoption of cryptocurrency by other governments. Although El Salvador is currently the only country that has adopted Bitcoin as legal tender, it looks as if the domino effect has been set in motion. Paraguay, Panama and Mexico are all taking the first steps in following El Salvador’s example. In this article, we will take a look at the progress being made in the LATAM crypto space-race!

Paraguay

Paraguay has recently proposed a Bitcoin bill, which aims to create a legally defined “blockchain industry.” A decent amount of Bitcoin mining already takes place in Paraguay; however, members of the Paraguayan government would like to see more of it. The goal is to incentivize all kinds of cryptocurrency companies to move their operations to Paraguay. The bill will offer frictionless fiat and cryptocurrency banking services, on the foreign and domestic scales, at a low corporate tax rate of 10%.

Miners will also have incentive to move their operations to Paraguay because of the incredibly cheap, and 100% green energy Paraguay has to offer. Paraguay has so much green energy, that they currently sell three quarters of it to neighboring countries “almost for free”. Incentivizing miners to operate in Paraguay is an efficient way for the country's government to get the most they can out of their energy abundance.

If the new cryptocurrency participation incentives in Paraguay go as well as the country is hoping, members of congress are planning on passing another bill, which would make Bitcoin legal tender. This would make Paraguay the second country in world history to legally adopt Bitcoin. It looks like this is going to be the case, as many companies in Paraguay are now accepting Bitcoin as payment. These companies include the largest media company in the country, as well as one of the country’s largest online universities.

Panama

Although the specific details of Panama’s cryptocurrency bill are somewhat more unknown, Panama’s bill is reportedly quite similar in nature to that of Paraguay’s. The bill incentivizes cryptocurrency business and miners to move to Panama for similar reasons, and – if passed – will include the adoption of Bitcoin as legal tender. The bill may have a chance to pass more quickly in Panama, because of the structure of the Panamanian government. Panama is already a known tax-haven, with some of the richest people in the country paying no income or capital gains taxes whatsoever. The bill however is coming from the opposition party, so there is a possibility that the bill could be vetoed by the current president, even if it passes through congress.

Mexico

Many lawmakers in Mexico are writing bills regarding cryptocurrency as well; however, it is unlikely that these bills will lead to an adoption of cryptocurrency as legal tender anytime soon. Because the cartels in Mexico regularly use cryptocurrency to launder money, the country will have some serious obstacles in its way before it can do much of anything in the way of full-scale adoption. The bills in Mexico are currently focused entirely on the proposed legal framework of cryptocurrency.

The private sector of Mexico, however, is seeing quite a bit of cryptocurrency adoption. Mexico’s third richest man – Ricardo Pliego – plans to start accepting Bitcoin at his bank, making it the first bank in Mexico to accept cryptocurrency. Although there are laws preventing banks from holding cryptocurrency in Mexico, Pliego is fighting for that to change. Currently Mexico does not consider cryptocurrency as an asset or currency, of any kind.

In conclusion

Latin America is leading the pack in cryptocurrency adoption because it offers an alternative to the USD. The United States’ excessive inflation of the USD is devastating to the economies of the Latin American countries which use the USD as legal tender. As the United States prints more money, the smaller countries in Latin America, which are dependent on the USD are being financially suppressed to a far greater degree than countries that have their own currency.

It is unlikely that cryptocurrency will be adopted by any of the first-world superpower nations anytime soon; however, the adoption of cryptocurrency in Latin America is definitely a step in the right direction.

If you like this article, check out El Salvador Votes in Bitcoin as Legal Tender

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