An MP in Tonga is trying to convince the government to adopt bitcoin as legal tender in the country. Bitcoin is the world’s most valuable cryptocurrency which is currently trading at over $52,000 (approximately Rs.39.6 lakh). MP Lord Fusitua believes that Tonga should follow El Salvador and recognize bitcoin as legal tender. They believe the island nation loses a substantial portion of the money remitted to its citizens working overseas as remittance platforms charge.
The crypto-enthusiast believes that Tonga should start by adopting the Strike Digital Wallet, which is based on the Bitcoin Lightning Network so that citizens working abroad can send money back home at no extra charge. 250,000 to 300,000 Tongans have moved to other countries to earn money. For Tonga’s 100,000 residents, money that their families or relatives remit from other countries is an essential part of their livelihoods and the national economy.
“Tonga is the most remittance-dependent country on Earth. Between 38 percent and 41.1 percent of our GDP, depending on which World Bank data you use, are remittances. So, almost half of our economy is our diaspora. The money has been sent back from the Bank,” a report in the Financial Review quoted Lord Fusitua as saying.
As a service fee, international money transfer platform Western Union reduces 30 percent of remittances reaching Tonga from its diaspora operating overseas.
“So, in 2020 our GDP was $510 million (about Rs 3828.8 crore), so 30 per cent of this or $60 million (about Rs 450 crore) is Western Union fees only,” the MP said.
Citing El Salvador’s fate, Lord Fusitua said Western Union was cutting their remittances by more than 50 percent, which would no longer be an issue. In September, El Salvador became the first country to legalize bitcoin as legal tender alongside the US dollar – which would facilitate international monetary transactions without any additional fees.
Despite the reluctance of the Reserve Bank of Tonga to legalize bitcoin, Lord Fusitua is preparing a bill to be extended to Tonga’s king, Tupo VI, as well as the country’s prime minister, Pohiva Tu’Onetoa.
In May 2022, a private member’s bill introduced would require votes in favor and against Tongan officials and cabinet ministers, the outcome of which would decide bitcoin’s entry into the country.
Earlier in June, the governor of the Reserve Bank of Tonga, Sion Ngo Kioa, said that he was not considering adopting bitcoin as legal tender anytime soon.
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