According to a former Tonga MP named Lord Fusitu’a, his country will start accepting Bitcoin as legal tender in November. Tonga is following the example of El Salvador.
Tonga goes after El Salvador
In a series of tweets, Lord Fusitu’a, a former MP for Tonga, provided an update on Bitcoin becoming legal tender in the country. By copying El Salvador’s move, more than 100,000 Tongans will soon be able to use the Bitcoin network.
In a five-step plan, the former MP describes the way to adoption:
1. Sept/Oct Bill goes to Parliament. passed.
2. Sent to Palace Office for submission to His Majesty for Royal Assent.
3.4. 2-3 Weeks Gazetted by Govt activation date set.
4. On activation date #BTC becomes legal tender. https://t.co/TNjQjeEbjN— Lord Fusitu’a (@LordFusitua) January 12, 2022
In a follow-up comment, Fusitu’a said the bill is modeled after and nearly identical to El Salvador’s bill.
Last year there was already speculation that Tonga would become one of the next countries to use BTC as legal tender. Speculation peaked after a podcast conversation Lord Fusitu’a had with Peter McCormack.
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Why does Tonga want to accept Bitcoin as legal tender?
Tonga is a remote island nation that relies on money transfers from countries like Australia, New Zealand, and the United States. The International Finance Corporation estimates that Tonga receives more revenue from remittances than any other country in the world. Namely up to 30% of the family income.
That is not surprising since there are more Togans living abroad than on the island itself. Being able to transfer money easily and cheaply is therefore extremely important in Tonga. This is also the case for El Salvador.
Aside from the remittances, Lord Fusitu’a told that there are domestic advantages when accepting BTC. He said that Tonga could create a circular economy of BTC and that it is one of the few cases where being a sparsely populated archipelago of a small kingdom is an advantage.
There are, however, problems that need to be addressed. Data from the World Bank from 2017 shows that only 50% of the inhabitants were connected to the internet. According to Fusitu’a, however, that has not been so low for a long time. He says that today more than 90% of the inhabitants have a smartphone with internet.
