The cryptocurrency community is now betting on Paraguay to become the next country to declare Bitcoin a legal tender.
According to the survey by CoinMarketCap, as of July 20, 2021, the country received 81,433 votes, followed by Venezuela at 58,656 votes. The top ten countries likely to declare Bitcoin a legal tender received a total of 234,057 votes. Anguilla ranks in the third spot with 34,376 votes, while Panama received 17,323 votes, followed by India at 13,148 votes.
Other countries to rank top include Zimbabwe (8,704), United States (7,823), Mexico (4,245), Ecuador (4,245), and Bangladesh (4,104). South American and Caribbean nations dominate the list with a share of 50%.
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Besides the United States, most countries on the list are still developing with considerable weak economies. The countries have undergone a combination of inflation, hyperinflation cycles, and deflation alongside a large percentage of the unbanked population.
Therefore, the decentralized nature of Bitcoin makes it ideal as they attempt to follow in the footsteps of El Salvador.
Worth noting is that the countries appear to be sidelining the idea of following the CBDC route. However, there is a likelihood that developed countries like the U.S. are considering the idea of a CBDC as opposed to legalizing Bitcoin. Notably, regulators from the developed countries have raised concerns regarding the volatility of Bitcoin alongside the ability to aid crime.
With the potential of increased Bitcoin legalization, there is a general expectation across the crypto community that it might positively impact the asset’s price. However, since El Salvador legalized Bitcoin, the asset’s price has remained in a volatile state, trading around the $30,000 mark. The volatility is mainly due to the crypto crackdown in China.
Concerns over Bitcoin legalization
Additionally, El Salvador’s move to legalize Bitcoin has been met with resistance, with financial experts terming the move as a mistake. For instance, the Professor of Applied Economics at Johns Hopkins University, Steve Hanke believes the move will potentially experience a complete economic collapse.
“They will suck up all the dollars and outsell, or like a vacuum cleaner going through there, and the economy will collapse. So that’s why it’s so stupid. It has the potential to completely collapse the economy because there’d be no money in the country. They don’t have a domestic currency,” said Hanke.
Furthermore, with more South American countries touted to adopt Bitcoin, Hanke believes that criminal elements are behind the move. He notes that most of the countries have scored poorly in the corruption index.
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