El Salvador surprised the world in 2021 when, at the Bitcoin 2021 conference, it announced plans to make Bitcoin legal tender. The Central African Republic followed in 2022, and several other countries have since been mentioned as potential adopters.
Who’s Next?
It’s important to note that these countries are not major economic powers or highly populous nations, but there was never any expectation that global financial leaders would be the first to declare Bitcoin legal tender.
It makes sense that countries at the margins of the global financial system would be among the first to embrace Bitcoin. Many of them have exhausted traditional options and view Bitcoin as a potential path toward improved economic prospects. Below we take a closer look at three countries that could become the next to recognize Bitcoin as legal tender.
1. Panama
Panama, which borders Costa Rica and is relatively close to El Salvador in regional terms, has been mentioned frequently as a likely candidate. Unlike many others that are merely rumored to consider legal tender status for Bitcoin, Panama has already drafted proposed legislation. That draft emerged shortly after El Salvador officially adopted Bitcoin. The law has not yet been passed, but there is a real possibility that Panama could join El Salvador and the Central African Republic in the future.
2. Cuba
Cuba has not made Bitcoin an official legal tender, but the country has taken notable steps toward broader recognition. Bitcoin is acknowledged as a means of payment, and residents are free to use it. The move toward cryptocurrency acceptance was partly driven by tighter U.S. remittance rules affecting money sent from the United States to Cuba; among other consequences, roughly 400 Western Union branches in the country were closed. These pressures have increased interest in alternatives for cross-border payments, like Bitcoin.
3. Mexico
At Bitcoin 2022, Mexican senator Indira Kempis made a surprising appearance and signaled interest in advancing Bitcoin adoption in Mexico. She could not announce a definitive plan to make Bitcoin legal tender, but she indicated she will push for progress within the country. Mexican adoption would be especially significant because, unlike the other candidates listed, Mexico is a large economy. With a population of about 131.5 million and a 2020 GDP of roughly $1.076 trillion, Mexico’s decision would carry considerable weight. That said, the likelihood of Mexico declaring Bitcoin legal tender in the near term appears low. Kempis herself warned that it would be an uphill battle.
In short, while El Salvador and the Central African Republic grabbed headlines by making Bitcoin legal tender, other nations are exploring ways to integrate cryptocurrencies into their financial systems. Some are moving faster than others: Panama has legislative drafts, Cuba has loosened restrictions and recognized Bitcoin as a payment option, and Mexico has political advocates pushing for change. Whether any of these countries will follow through remains uncertain, but their interest reflects ongoing global experimentation with new monetary tools.