El Salvador, a small Central American coastal country, became the first in the world to legalize digital currency Bitcoin (BTC) on June 9, 2021. The measure was supported by a majority vote of 62 out of 84 members of El Salvador’s parliament. It mainly implies that pricing can now be shown in Bitcoin and tax contributions can now be paid using digital currency. El Salvador lacks its own monetary policy and hence no local currency to safeguard, which is the driving force for the decision. The country was officially ‘dollarized’ in 2001 and now follows the US Federal Reserve’s monetary policies. However, the shift in El Salvador is partly inspired by the Federal Reserve’s loose and expansionary policies, which is crucial to monetary thought. While banks in the United States acquired liquidity as a result of the stimulus, El Salvador did not, and instead lost purchasing power. Bitcoin proponents applauded El Salvador’s actions, which they regard as a viable alternative to fiat currencies. While this sets several precedents for the worldwide debate on cryptocurrencies, we look at what this means for other countries, particularly India. Countries Where BTC Adoption Is Being Considered Politicians from various nations have begun asking for the adoption of Bitcoin as legal money, following the lead of El Salvador. Inflation, dependency on the US dollar, and a mechanism to promote digital entrepreneurship all are driving interest in Bitcoin. “In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy,” said El Salvador’s President Nayib Bukele. Mexico Eduardo Murat Hinojosa, a senator in Mexico’s federal government, has said that he will present a proposal to parliamentarians aimed at promoting cryptocurrency adoption in the country. Hinojosa updated his profile photo to a senator speaking into a microphone with the trademark “laser eyes” in a tweet, signaling support for cryptocurrency. In Mexico’s lower house, the legislator claimed he would be “supporting and proposing a legal framework for cryptocurrency,” explicitly Bitcoin (BTC). Hinojosa isn’t the only Mexican legislator who has expressed interest in cryptocurrency. Senator Indira Kempis Martnez of Nuevo León has similarly changed her profile picture to portray laser eyes, with Hinojosa referring to her as a supporter of the cause. “We are going to lead the shift to crypto and fintech in Mexico.” Although many private investors in Mexico support Bitcoin, officials in the country stated last year that cartels were boosting their use of cryptocurrency to launder funds. At the time, the head of the Mexican Attorney General’s Cyber Investigations Unit stated that the country’s law enforcement lacked the resources needed to combat money laundering involving cryptocurrency. Iran Hassan Rouhani, the Iranian president, has instructed his government to begin developing a framework to regulate cryptocurrencies such as Bitcoin. He believes that good communication about the laws and procedures would help deter dishonest crypto firms, which have enjoyed a free run thus far. This comes after the country issued a four-month blanket ban on bitcoin mining earlier this year owing to a power crisis. He also cautioned retail investors to avoid “unprofessional” enterprises that are currently operating in the field. Rouhani told the Economic Coordination Board that supervision is essential for the widespread acceptance of cryptocurrency. Because trading in the US dollar is limited, the country is essentially cut off from the global banking system. The dollar is commonly recognized as the de facto international currency with the greatest purchasing power. In the face of such adversity and sanctions, Iran has enthusiastically welcomed the cryptocurrency revolution. Brazil Fabio Ostermann, a State Deputy for the Rio Grande do Sul in Brazil, got in on Twitter with laser eyes and shared a post from the prominent Bitcoin account, Documenting Bitcoin. Ostermann had added laser eyes signifying Bitcoin support, according to the Documenting Bitcoin site. Gilson Marques, another Brazilian Federal Deputy, updated his profile photo with the hashtags #Bitcoin and #ToTheMoon. Marques also claimed to be the first Brazilian deputy to remark in the Chamber of Deputies, “tax is theft.” So Where Does India Stand Here? El Salvador’s move had a positive effect on the mind of India’s lawmakers. Looks like the government is finally understanding the potential good crypto can bring to the economy of the country. Top industry sources told an Indian media outlet that the government has reversed its previous negative position against virtual currencies and will most likely categorize Bitcoin as an asset class in India soon. According to sources, the Securities and Exchange Board of India (SEBI) would oversee laws for the cryptocurrency sector following Bitcoin’s categorization as an asset class. The Indian crypto business is also in discussions with the finance ministry about the creation of a new set of laws, according to industry sources, and an expert group at the ministry is looking into the topic. … Continued
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