Paraguayan MP Sends Cryptic Tweet - Will The Country Recognise Bitcoin as a Legal Tender?

Paraguay is hinting that it will soon be the second country in the world to accept Bitcoin as legal tender after El Salvador.

By
Chung Yee
on
June 8, 2021
Category:
Blockchain News

Paraguayan MP Spotting the Laser Eye

The Paraguayan Member of Parliament (MP), Carlitos Rejala posted a photo of a tweet on Monday of himself with a pair of laser eyes. The beaming eyes are a common nuance in the Bitcoin community on Twitter as a way to indicate their eyes are fixed on the $100,000 mark. 

Rejala ended his tweet with two very recognizable emojis on crypto Twitter, the rocket emoji and the Bitcoin emoji. The Paraguayan’s tweets coincided with the Uruguayan President’s recent announcement that a bill will be presented to their Congress to recognize Bitcoin as a legal tender. While there is no direct link on the recognition of Bitcoin as a legal tender, the announcement that major news is coming has left many wondering whether the domino effect has taken place. 


Partnership with Paypal

Citing PayPal in his tweet, Rejala announced that exciting news will be coming this week. Paypal has been instrumental in the adoption of crypto as part of the services it offers. Carrying the role as one of the world’s leading payment solutions providers, Paypal cannot overlook the sentiment of its users as it has made multiple crypto announcements as of late.

On March 30, 2021, Paypal announced that its users can use cryptocurrency as a payment method. Later in April 2021, the platform’s users were given the green light to integrate their accounts to digital wallets operated by Coinbase. And finally, Paypal announced In May 2021 that withdrawals of cryptocurrencies will soon be an added feature to its customers’ wallets. 

Paypal acting as a payment solution provider with Paraguay brings hope of innovation to the country. We may see the creation of a crypto-friendly framework and the adoption of digital wallets allowing payment solutions with Bitcoin as the mode of payment. 

Whether Paraguay is prepared to take it one step further by declaring Bitcoin as a legal tender remains to be seen. 

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Meaning of ‘Legal Tender’

Lately, there have been many reports citing the use of Bitcoin as legal tender. This term may be confusing to some since Bitcoin was openly declared a commodity back in September 2015. The use of Bitcoin to pay for goods and services is becoming increasingly popular. If the legality and value of Bitcoin have been recognized by the authorities and openly accepted as a mode of payment, is it not a legal tender?

The term ‘legal tender’ comes from the codified legal recognition that is often accorded to the native currency of a sovereign state. It usually means it must be compulsorily accepted in satisfaction of a debt. In other words, it is a country’s officially recognized medium for economic exchange. Right now, customers cannot demand that a merchant accept their cryptocurrency as payment for goods in any country. It is only good as payment if agreed by the merchant. The same cannot be said for legal tender. In this case, there is a legal compulsion to accept. 


Could Panama Join the Club?

Politicians from Panama are also hinting to join the growing number of Latin American countries that are welcoming the interest in Bitcoin into their official policy and legal framework. Gabriel Silva, a Panamanian Congressman, said on June 7th, that Panama should not be left behind. He further stated that a proposal is in the works to be presented to the National Assembly. 

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Countries like El Salvador, Paraguay, and Panama are incentivized to build their economy around the crypto market. These countries see this pivot as a hedge against the uncertainties posed by the US Dollar. The risk of a destabilized dollar and inflation can destroy smaller countries that rely heavily on foreign trade.


The Domino Effect

The attributes of Bitcoin as a cryptocurrency have been well narrated. Policymakers and regulators are aware of the technological potential that it offers. However, the first step is always the hardest as it takes a tremendous amount of conviction and courage to break away from traditional finance, especially for a sovereign country. Once this psychological barrier is dismantled, the moon is the limit.  

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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance.

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