Bitcoin may be adopted by more LATAM nations soon
Several Latin American (LATAM) countries are considering adopting Bitcoin as they follow in the footsteps of El Salvador. However, an increase in BTC transaction fees may make daily use impractical.
El Salvador was the first country to adopt Bitcoin as legal tender, but a number of others in the region could follow suit.
According to strategist Samson Mow, Ecuador and Peru are among the nations that can adopt Bitcoin as legal tender.
“Many countries in Latin America will adopt Bitcoin,” he told Reuters last week. El Salvador was first, but “we know that many other countries in the region are starting to look towards it,” he added.
Bitcoin adoption advocacy group JAN3 commented:
“It is undeniable that countries with rampant inflation look most out of people’s sheer necessity to protect their income and savings.”
Bitcoin to LATAM
Mexico is another country that may adopt BTC, according to Mow, who so:
“There is a potential for Bitcoin to transform not only Mexico, but the entire Latin American region and bring more prosperity.”
Furthermore, Argentina is also on that list because a pro-Bitcoin presidential candidate is leading the polls.
The libertarian Javier Milei was cited as if to say: “The central bank is a fraud. It is a mechanism by which politicians deceive the people with the inflation tax.”
Meanwhile, back in El Salvador, President Nayib Bukele decided legislation removing taxes on technological innovations on May 4.
The Innovation and Technology Manufacturing Incentives Act eliminates all taxes on software and app programming, AI, computer and communications, and hardware manufacturing.
America, on the other hand, remains eager to stop the crypto industry. The US government’s latest anti-crypto move was a proposed 30% tax on crypto mining.
Transaction Fees Spike
Using BTC for daily expenses may not be practical at the moment as transaction fees have increased. According to Mempool Space, the average transaction fees are around $10, having increased to $20 a few hours ago.
Instasize CEO Hector Lopez tweeted about the pain of using BTC to pay for his lunch in El Salvador on May 8.
“4 Pupusas = $3.00
Bitcoin fee = $9.00
TOTAL = $12.00How will VISA compete?”
The answer is to use the Lightning Network, which dramatically reduces transaction fees. According to Bitcoin Visuals, LN usage has increased by 77% in the last 12 months in terms of channels. Furthermore, the current LN network capacity is at a record 5,463 BTC.
The memecoin madness-induced demand will only increase the need for payment channels like the Lightning Network. This will go a long way to solving the transaction issue for countries that adopt it.
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