A parliamentarian in Tonga is trying to convince the government to adopt Bitcoin as a legal tender in the country. Bitcoin is the world's most-valued cryptocurrency that is currently trading at over $52,000 (roughly Rs. 39.6 lakhs). Parliamentarian Lord Fusitu'a believes that Tonga should follow El Salvador and recognise Bitcoin as legal tender. He believes that the island nation loses a large chunk of the money sent from its citizens working abroad as fees for remittance platforms.
The crypto-enthusiast believes that Tonga should start by adopting the Strike digital wallet, which is based on the Bitcoin Lightning Network so that the citizens working abroad can send back money home without any extra charges. Between 250,000 to 300,000 Tongan people have migrated to other countries, in order to earn money. For the 100,000 inhabitants of Tonga, the money their family or relatives send from other countries makes for an essential part of their livelihood and national economy.
“Tonga is the highest remittance-dependent country on earth. Between 38 per cent and 41.1 per cent of our GDP, depending on which World Bank figures you use, are remittances. So, nearly half our economy is money sent back from our diaspora,” a report by Financial Review quoted Lord Fusitu'a as saying.
As a service fee, international money transfer platform Western Union chugs down 30 percent of the remittances that must reach Tonga from its diaspora working in foreign countries.
“So, our GDP in 2020 was $510 million (roughly Rs. 3828.8 crores), so 30 percent of that or $60 million (roughly Rs. 450 crores) is fees alone to Western Union,” the parliamentarian added.
Citing El Salvador's fate, Lord Fusitu'a said Western Union was cutting over 50 percent of their remittance, which however, will no longer be an issue. In September, El Salvador became the first country to legalise Bitcoin as a legal tender alongside the US Dollar – that will facilitate international monetary transactions, without any extra fee.
Despite reluctance from Tonga's Reserve Bank over legalising Bitcoin, Lord Fusitu'a is preparing a bill to be extended before King of Tonga, Tupou VI as well as, Pohiva Tu'i'onetoa, the Prime Minister of the country.
In May 2022, the tabled private member's bill will require for and against votes from the Tongan authorities and cabinet ministers, the result of which will decide Bitcoin's entry into the country.
Earlier in June, Sione Ngongo Kioa, the Governor of the Reserve Bank of Tonga, said they were not considering the adoption of Bitcoin as a legal tender anytime soon.