The global pandemic of COVID-19 has triggered a worldwide economic depression. As the result of central bank policies, hyperinflation, and macroeconomic instability, countries around the world have suffered from currency volatility and depreciation. During the same period, the crypto market has achieved a rapid expansion. Individual investors, listed companies, and even national governments have noticed the perks of cryptocurrencies like Bitcoin. However, cryptocurrencies have also been closely monitored by national regulators. Some governments have expressly banned cryptocurrencies, whereas others have adopted an open and inclusive stance on the matter.
The first country we should mention is El Salvador, which is the first country that has adopted Bitcoin as legal tender. In June, after a majority vote, El Salvador’s Legislative Assembly passed the Bitcoin Law, which approves Bitcoin to be used as legal tender in the country. Taking effect on September 7, the Law allows Salvadorians to price goods and services in Bitcoin. Furthermore, citizens can pay taxes with BTC, and businesses cannot refuse Bitcoin payments.
Right after El Salvador’s adoption of Bitcoin, the Republic of Panama, another Central American country, also introduced a bill regulating cryptocurrencies. The bill aims to recognize crypto assets like Bitcoin as an alternative global payment method for any civil or commercial operation not prohibited by the legal system of the Republic of Panama. To explain what the bill is about, Panamanian congressman Gabriel Silva shared a video on Twitter, in which he stressed that “the new legal initiative has the potential to create new sources of revenue for local businesses and generate thousands of jobs”.
However, unlike the Salvadoran government, which compels local businesses to accept Bitcoin payments, Panama does not intend to force the acceptance of Bitcoin through its crypto bill.
On September 9 (local time), the Verkhovna Rada, Parliament of Ukraine, passed a bill to legalize and regulate cryptocurrencies with an absolute majority. According to informed sources, the legal process of this bill started in 2020. Right now, it is sitting on the desk of Ukrainian President Vladimir Zelenskiy, who will decide whether to sign it into law. The bill stipulates that though virtual assets cannot be used for payment in the country, they can be legally held and traded by citizens. If crypto companies plan to operate in Ukraine, they will have to be licensed. The draft law “On Virtual Assets” №3637 defines virtual assets that included cryptocurrencies such as Bitcoin, as well as tokenized assets.
Cryptocurrencies have been in a gray area of Ukrainian laws. Though the government allows citizens to buy and trade cryptocurrencies, crypto companies and exchanges are often on the radar of the country’s law enforcement agencies. Like Panama, Ukraine did not give Bitcoin the same status as its legal tender hryvnia in its crypto bill. What is noteworthy is that, according to the relevant media reports, Ukrainian President Vladimir Zelenskiy has sent a team to El Salvador for field surveys. Very likely, the President is planning to take lessons from El Salvador and formulate a “Ukrainized cryptocurrency policy” based on the country’s national realities.
We can tell that though the three countries differ from one another in terms of culture and economic priorities, they all share one feature: Their national economy urgently needs renewed vitality in the face of a low national GDP, a sluggish economy, and low living standards. However, these economies are curbed by the United States. To eliminate the dollar’s control of their economies, many countries are eager to try out the cryptocurrencies that have emerged. Therefore, the legalization of Bitcoin and other cryptocurrencies and adopting them as legal tender is a bold and visionary attempt, and only time will tell where it may lead us.