Setting The Stage For Countries To Adopt Bitcoin
Bitcoin is getting ready to take center stage in 2024. With talk of Bitcoin Spot ETFs, the halving, and a new wave of mainstream interest coming in the next few years, it begs the question:
Which countries will adopt bitcoin in 2024?
We’ve seen bitcoin rise from once peaking the interest of tech geeks to now persuading countries to embrace it as a legal form of tender. With the devaluation of fiat currencies placing more and more global pressure on people to retain their purchasing power, bitcoin’s value proposition is becoming clearer than ever for countries who need it the most.
Why Do Countries Need Bitcoin?
But first of all, why do countries even need to adopt bitcoin in the first place?
Two words: Financial sovereignty.
For too long, history has proven why the fiat currencies we use today fail to support our civilizations sustainably over time. It’s because fiat is malleable.
Since they’re governed and inflated by central authorities, fiat currencies erode citizens’ purchasing power as new units come into circulation, and generally hinge on the whims of the powers that enforce them. Over time, all this economic and political corruption has left many nations bankrupt, with citizens using their fiat money as tissue paper rather than as a medium of exchange.
On the other hand, a digital currency like bitcoin is decentralized. No single authority can control it or change it, and thus it maintains a fixed 21 million unit supply, as opposed to an infinite supply of fiat. As long as demand for bitcoin exists, this inherent scarcity requires bitcoin’s value (and thus holders’ purchasing power) to rise over time to accommodate that demand.
As a money, bitcoin is far better suited to economically support struggling nations around the world. Despite bitcoin’s short-term volatility, its long term resiliency has proven itself capable of changing lives cycle after cycle. Not only could bitcoin repair these countries’ financial well-being, it could also save them time, costs, and otherwise wasted energy spent on building outdated banking infrastructure.
If there’s anything to be learned from China’s Tiananmen Square, it’s that political freedoms do not come without economic freedoms. While many understandably cry out to their politicians to bring change in their country, perhaps a new form of money would better support these citizens’ desires to live freely from their nations’ leaders.
Which Countries Have Already Adopted Bitcoin?
Thankfully, many countries around the world have caught onto the flaws of their current money and opted out for better alternatives like bitcoin.
El Salvador
It’s rather poetic how the name of the first country to adopt bitcoin as legal tender translates in English to “The Savior.”
El Salvador became the first nation in the world to adopt Bitcoin as legal tender in June 2021, making a bold statement to the world as to the legitimacy of bitcoin in mainstream finance.
The country received plenty of backlash for its decisions from citizens, other governments, and economic institutes like the International Monetary Fund (IMF).
Despite the conflicting response, El Salvador remained steadfast in its decision, which looks to be paying off now that the policy has had time to settle in.
Tourism is up significantly in the country, while the nation reduced its notorious homicide rate by over 56% in the span of 2021-2022.
With the development of its geothermal bitcoin mining operation, his progress on bitcoin-backed “Volcano bonds”, and the promised “Bitcoin city”, Bukele has a lot in store to fully realize his vision for bitcoin in El Salvador. Most recently in May of this year, he eliminated “all taxes (income, property, capital gains and import tariffs) on technology innovations, software and app programming, AI, computer and communications hardware manufacturing.”
Whether or not Bukele’s Bitcoin plans come to fruition is another story, but the message is clear: bitcoin inspires economic reform, and El Salvador was just the first example of many to come.
The Central African Republic (CAR)
Interestingly enough, the Central African Republic (CAR) became the second country in the world to adopt bitcoin as legal tender in April 2022, however, the country has since slid back on that decision.
CAR ranks second to last among countries in the 2018 Human Development Index, with around 79% of its 4.9 million people living in poverty.
While bitcoin solves nations’ lack of financial sovereignty, it can’t solve all underlying issues. Much of the country still lacks basic electricity. Only 11% of the nation has internet access, and other missing infrastructure puts bitcoin in a tough position to see real adoption there.
While the nation’s authorities may have had the right idea with bitcoin, it’ll take more time to build the critical infrastructure needed to skip banking altogether and onboard CAR to the Bitcoin network.
Beyond El Salvador and the Central African Republic, however, people around the globe are using bitcoin more than ever before.
Data from Chainalysis reveals where general crypto adoption is most active, ranking the top 146 countries. Under each category, the top 10 countries listed here earn a score relative to their ranking among other countries (lower is better):
In terms of which countries hold the most bitcoin, it’s no surprise who dominates that list:
However, keep an eye on some of these smaller counties on this list, because they could be up next to adopt bitcoin as legal tender.
Which Countries Could Adopt Bitcoin In 2024?
A combination of Bitcoin Spot ETF approvals, the halving, and a whole host of positive metrics paints a compelling picture to nations around the world: bitcoin is going viral. It’s become especially clear for those countries suffering the most from their own currencies’ hyperinflation.
Take the first country on this list: Argentina.
Argentina
The Argentinian Peso (ARS) has fallen off a cliff in the last decade, and it’s no surprise why: The Argentinian government is printing exponential units of new currency, diluting its purchasing power for the nation’s 46 million people.
Argentinian economist Carlos Perez estimates the country’s annual inflation rate to average a staggering 147% in 2023.
For reference, the US annual inflation rate as of August 2023 is just 3.2%.
Here’s what the value of the ARS looks like relative to the US Dollar on a monthly chart over the last decade:
Imagine losing 23% of your purchasing power in the last month alone.
Given the state of the ARS, it’s no surprise that Argentina has become one of the most fervent adopters of bitcoin in the last few years.
Turkey
Turkey’s currency, the Turkish Lira (TRY), is undergoing a similar fate to that of the ARS.
With its currency in freefall, Turkish citizens are seeking refuge in alternative stores of value. Bitcoin is atop that list thanks to its highly accessible and liquid nature, making it very easy for people to trade in and out of.
In April 2021, the Central Bank of the Republic of Turkey deemed bitcoin illegal for payments, however, that doesn’t prevent Turkish people from buying and holding their own money with it. Going into 2024, bitcoin could prove to be more valuable to the country than its central banks thought two years ago.
Vietnam
Vietnam is already a national leader in Bitcoin adoption by certain metrics, so the country could be poised to fully embrace bitcoin as legal tender in 2024.
Aside from Vietnam’s position as the number one overall ranking, the country has another standout statistic from the rest of the top 10 in the aforementioned Chainalysis data: P2P exchange trading volume.
69% of the Vietnamese population is unbanked, so it only makes sense why such a small country could lead the world as the second-most active P2P trading country.
Vietnam represents one of many Southeast Asian countries where bitcoin is catching on. Thailand, Malaysia, Indonesia, Philippines, and more have all seen rapid growth in Bitcoin adoption, and there are no signs to suggest that trend should stop going into 2024.
Lebanon
Lebanon is one of, if not, the most remittance-dependent country in the world, accounting for a massive 53.8% of the nation’s GDP in 2021.
It’s more difficult to estimate the direct benefit to families, but an estimated 15-30% of Lebanese families report relying on remittances as a source of income.
On top of that, a 154.8% annual inflation rate doesn’t help.
Having to rely on outside payments is a precarious spot for any country to be in. By moving all these remittance payments onto Bitcoin rails, the wealth benefits to the nation from all the savings on fees and time could help the nation get back up on its feet.
Venezuela
El Salvador’s South American neighbor Venezuela is another perfect candidate for Bitcoin adoption.
As of 2021, Venezuela is deeply poverty-stricken, with almost 91% of the population living below the nation’s poverty line, and 68% living under extreme poverty.
Like other Bitcoin adoption candidates, Venezuela is living in the midst of its own hyperinflationary episode. Inflation is out of control in Venezuela, hitting an annual rate of just under 400%.
The common thread between most of the chosen countries on this list: their currencies are in free fall, and the unfortunate reality is that evaporating currencies will likely be the ultimate push to drive bitcoin adoption.
It’s hard to fully understand a problem until you feel it yourself, which is why first-world nations like the US and China tend to adopt bitcoin much slower than smaller, economically-stripped countries in less developed regions of the world.
Looking Forward To Bitcoin Adoption In 2024
As 2024 draws closer, there are a lot of Bitcoin catalysts brewing on the horizon. Firstly being the spot exchange-traded fund (ETF) for bitcoin. The Securities and Exchange Commission (SEC) have been working through several Bitcoin Spot ETF applications, which would open the floodgates for institutional capital to flow in.
While the SEC just delayed all spot ETF applications, they’ll have to revisit them as we head into 2024.
The ETF talk is conveniently stirring up just before bitcoin’s historic halving event, which cuts daily supply issuance in half and usually generates huge media and public attention. With a 50% squeeze in supply issuance and multiple Bitcoin Spot ETF approvals potentially on the way next year, 2024 could be yet another breakout year for Bitcoin adoption.
In other parts of the world, major economic giants like China and Russia have been getting familiar with bitcoin too.
Despite China’s outright bans on crypto trading and mining, regulators from Hong Kong proposed legislation defining guidelines for “virtual asset trading platforms.”
Russia took the opportunity in 2023 to become the second-largest crypto mining country in the world, behind the US, and suggested legalizing bitcoin and cryptocurrency at large as a means of payment “sooner or later.”
Final Thoughts
Bitcoin adoption certainly won’t happen overnight, but there are plenty of reasons to believe that bitcoin’s mainstream growth is right on track. Aside from countries all around the world changing their tune on bitcoin, the US is debating on legislation right now for the asset’s future in the US.
The confluence of global regulatory acceptance, US legislation, and the impending Bitcoin halving could be the fuel needed to propel bitcoin further in 2024, and hopefully attract new eyes from around the world who are looking for economic refuge.
FAQs About Countries Adopting Bitcoin In 2024
Q: What does bitcoin as “legal tender” mean?
A: Bitcoin as legal tender means that it’s recognized as a form of currency. When El Salvador adopted bitcoin as legal tender in June 2021, that enabled the country’s citizens to freely transact using bitcoin if they desire.
Q: When will the US adopt bitcoin as legal tender?
A: There’s no promise that the US will recognize bitcoin as legal tender, however, multiple forms of legislation likely need to be pushed through before Congress would consider legalizing bitcoin as a form of currency, including Bitcoin Spot ETFs. However, the likely reality is that the US will not want to give up the US Dollar’s authority – and thus, it will be up to the market to decide which currencies people want to transact with.
Q: Which countries are leading in Bitcoin adoption?
A: According to data from Triple A, the USA (46 million owners), India (27 million), Pakistan (26 million), Nigeria (22 million), and Vietnam (20 million) have the highest rates of adoption. Despite Vietnam’s small size, it ranks second in peer-to-peer trading volume, making it a serious contender in terms of Bitcoin adoption.