A politician from Tonga, a small island nation in Oceania, plans to develop and approve in parliament a bill to make bitcoin legal tender, following the example of El Salvador.
Tongan MP Lord Fusitu’a, together with members of his parliamentary faction, is preparing a bill according to which bitcoin can become legal tender in the kingdom. In an interview with Financial Review, the politician said that the bill will be presented to the country’s parliament in May 2022.
Tonga has a population of just over 100,000. About 300,000 more citizens work in other regions of the world and financially support the island population. As of 2020, the country’s GDP is about $ 500 million, and revenues from external tourism completely cover the revenues from foreign economic activity.
“Tonga is the country with the most reliance on remittances in the world,” Fusitua said. “Between 38% and 41.1% of our GDP are remittances. Thus, almost half of our economy is money returned by our diaspora. ”
The politician argues his position by the fact that with the introduction of bitcoins into the country’s economy, the population’s expenses on cross-border transfers will significantly decrease. Western Union, on average, takes from 30% to 50% of the transfer amount, which annually deprives the Tongan economy of about $ 200 million only in intermediary fees. The Strike digital wallet will allow you to make transactions quickly and practically for free – this is almost the Salvadoran scenario.
Although Tonga is a small island country in Oceania, the MP hopes that she can successfully copy the experience of El Salvador. Other Pacific states such as Samoa, Fiji, Cook Islands and Guam may follow suit. Fusitua is confident that Tonga will benefit if it makes bitcoin legal tender alongside its existing state currency, the Tongan paanga.
The Governor of the Reserve Bank of Tonga, Sione Ngongo Kioa, is of the opposite opinion. He stated that the bank has no plans to use Bitcoin as a means of payment along with the Tongan paanga and considers the adoption of Bitcoin as an alternative currency for the country “definitely unlikely.”
The Fusitua project, based on the cryptocurrency experience of El Salvador, remains nothing more than a dream so far, but the politician is confident that he can overcome the potential resistance of the Tongan central bank, the executive branch or other MPs.
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