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An entirely bizarre and somewhat funny twist in crypto adoption by sovereign entities seems to be brewing in the Caribbean. Rolando Brison, a St Maarten lawmaker, has announced that the nation is considering a bill to make Bitcoin Cash (BCH) a legal tender. This comes after Briston became the first lawmaker and politician globally to receive his salary in Bitcoin Cash.
Today I become to first Elected official in the world to have his entire salary paid in #Bitcoincash, as our country moves more and more to making use of cryptocurrency and blockchain. Thanks @rogerkver for the guidance in making St Maarten the Crypto Capital of the Caribbean!
— Rolandobrison (@MPBrison) March 19, 2022
According to the United People’s Party leader, Bitcoin Cash offers an additional viable means for commerce, transacting, and saving. He further congratulated Roger Ver, the renowned Bitcoin Cash proponent, for helping to make St. Maarten the Caribbean’s cryptocurrency capital. According to the proposed law, Bitcoin and other non-fungible tokens would also be exempt from capital gains taxes.
Bitcoin Cash—St. Maarten’s Interesting Choice for a Legal Tender
On-chain data shows that BCH is being used by hundreds of merchants in the Caribbean. The region has emerged as a hotbed for crypto adoption following El Salvador’s use of Bitcoin as a legal tender. However, St Maarten’s choice of Bitcoin cash is baffling considering the availability of much more heralded and proven digital assets.
Bitcoin Cash came into existence in August 2017 following a hard fork of the Bitcoin network. It has an increased block size, enabling more significant transaction processing and improved scalability.
After the initial excitement about the asset, it has largely failed to live up to its billing with Vilalik Buterin, calling it largely a failure. The Ethereum founder, whose protocol is transitioning to a proof-of-stake consensus, had earlier lauded BCH as a legitimate contender for Bitcoin in 2017.
Today, I would call BCH mostly a failure. My main takeaway: communities formed around a rebellion, even if they have a good cause, often have a hard time long term, because they value bravery over competence and are united around resistance rather than a coherent way forward.
— vitalik.eth (@VitalikButerin) January 1, 2022
Following its launch, Bitcoin cash became one of the largest cryptocurrencies by market cap, surpassing Ethereum in 2017. However, the emergence of alternative layer 1’s and 2’s, which are faster and scale better, has seen it lose relevance.
It progressively faded into obscurity during the 2021 bull run, failing to acquire enough traction to catch up to other old-timers. The disputed Bitcoin fork is down 91.03% from its all-time high of $3,785.82 set in December 2017. On spot exchanges, it is now trading at $351. Unsurprisingly, Ver has been silent on Twitter for nearly a year.
With the entire crypto market ranging recently, Bitcoin Cash gained 20% last week, outperforming several altcoins. Its performance may have been driven by the news of its adoption in the tiny island nation.
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El Salvador’s Experiment with Bitcoin is Failing, According to Recent Survey
More questions are now asked about why countries like St. Maarten are considering digital assets as legal tender. El Salvador, who has championed the cause for a while now, even defying the International Monetary Fund(IMF), continues to be plagued with problems.
According to a new poll by El Salvador’s Chamber of Commerce, most of the country’s businesses do not use Bitcoin. This week’s results are astonishing considering Bukele’s efforts to promote Bitcoin usage.
The study revealed that only 14% of respondents had used BTC in transactions since the cryptocurrency became legal tender in September. It further suggested that a substantial majority of respondents have not noticed any impact on sales due to the adoption.
Small firms accounted for 70% of respondents in the study, large businesses 15%, and medium-sized companies accounted for 13%. Despite this result, Nabil Bukele continues to be bullish about Bitcoin, with El Salvador owning 1800 BTC. However, adoption remains very low even with the government’s best efforts to promote crypto use.
This emerging situation now begs whether digital assets are best used as legal tender compared with stablecoins or Central Bank Digital Currencies (CBDCs).
A new draft bill in the US congress could mandate stablecoins to be 100% backed by cash reserves. On the other hand, the IMF has thrown its weight behind CBDCs, calling it the future of money. Which will emerge the most suitable? Only time will tell.
Do you think more countries should consider digital assets as legal tender? Let us know your thoughts in the comments below.