Paraguay Hints at Making Bitcoin a Legal Tender After El Salvador

Bitcoin has reached the legal tender stage where countries have started to show interest in adding BTC to their state treasury and El Salvador became the first state to do so. The president of the country Nayib Bukele took to Twitter to announce the news and even revealed that citizens won’t have to pay any capital gain tax on Bitcoin since it is a legal tender now.  The president also changed his Twitter profile picture to include laser eyes, a popular ongoing meme trend for Bitcoiners.

Just a day after the announcement made by El Salvador President, another country has hinted at joining the Bitcoin league in the form of Paraguay. A politician from the country also changed his profile photo to include laser eyes and revealed a big announcement is coming this week hinting at a possible Bitcoin adoption as a legal tender.

Why Countries Are Turning to Bitcoin Now?

The 2017 bull run was majorly carried by retail investors as institutions watched from the sideline, not sure if BTC is just another internet bubble or something that people would invest in. 2021 bull run has proven that Bitcoin is a real store of value and here to stays. Realizing this, Institutions were quick to jump on the Bitcoin bandwagon, followed by publically listed fortune 500 companies adding Bitcoin to their treasury.

Now countries such as El Salvador and Paraguay have come to realize that Bitcoin offers censorship-resistant money that would not only help them see their county’s GDP growth.

El Salvador could play a similar role to Microstrategy and start a domino effect for other countries to join in on the Bitcoin bandwagon. The primary reason for these countries to turn to Bitcoin is the depleting value of the US Dollar, which might not be a big issue for the likes of the US in the short term as they can print as much as they need, but many other small nations suffer dearly.

El Salvador’s president explained Bitcoin would prove to be a boon for the country as a legal tender as it offers financial inclusiveness and the fact that 70% of the country’s population is unbanked. He explained,

70% of El Salvador’s population doesn’t have a bank account and works in the informal economy.

Financial inclusion is not only a moral imperative but also a way to grow the country’s economy, providing access to credit, savings, investment, and secure transactions.