The Future for Cryptocurrency is in Latin America

While America is looking to criminalize certain types of cryptocurrency transactions, including prison time, many countries south of the border are taking a completely opposite approach.

Last month, El Salvador was the first country in the world to legislate Bitcoin as legal tender. This month it’s mining the most environmentally friendly bitcoins through the use of volcanos and geothermal energy.

Joining El Salvador is likely Brazil, South America’s most populated country as they move forward to legislate Bitcoin as legal tender. There are also rumors abound of other South American countries considering following suit.

For investors, traders and many cryptocurrency initiatives, the ability to buy, sell and trade without fear of triggering capital gains, is a game-changer.

As the governments of these Central and South American countries continue to encourage their citizens to adopt Bitcoin, Central and South America will likely transform into regions with the largest active Bitcoin and cryptocurrency users in the world.

What is happening in the USA

New legislation in America is proposing to criminalize and even penalize with prison sentences the use of certain types of cryptocurrency and transactions.

According to a highly detailed report by Decentralized Legal System, US cryptocurrency regulation is far more invasive than originally thought, including:

• Banning the use of (unauthorized) stable coins
• Treatment of smart contracts as futures contracts
• Penality for the use of mixers and private coins (prison)
• Potential treatment of ICO’s as Securities

This new proposed US cryptocurrency legislation will effectively stifle the adoption and growth of cryptocurrency within the US. It’s also highly likely other commonwealth nations will adopt similar policies.

What is happening in El Salvador

Most likely the largest wide-scale adoption of cryptocurrency we are seeing is now in El Salvador. Under the new Bitcoin Law, businesses in El Salvador will be obliged to accept Bitcoin as a form of payment.

BTC is Legal Tender

In likely the most significant financial move made by any country in the world, in September El Salvador legislated the use of BTC as Legal Tender with its newly accepted Bitcoin Law.

For those of us living in North America or other countries where Bitcoin isn’t deemed legal tender, it’s also worth noting that these transactions do not trigger capital gains — That is, THERE ARE NO CAPITAL GAINS.

For day traders or those who perform many transactions, this is huge.

It doesn’t stop there…

El Salvador Gifted BTC to all its Citizens

In addition to this, El Salvador’s government is gifting $30 in free Bitcoin to encourage countrywide adoption and use of the cryptocurrency.

Can you imagine your government gifting you Bitcoin?

But, wait there is more…

El Salvador is Mining BTC from Volcanos

In a revolutionary turn of events, El Salvador in addition to being the first country in the world to legalize Bitcoin as legal tender, it is also now the first country in the world to mine the most environmentally friendly BTC through the use of geothermal energy created by volcanos - Increíble!

There is also an entire town in El Salvador that runs entirely on crypto…

Bitcoin Beach — The Town that runs Entirely on Crypto

Bitcoin Beach — The first town which runs entirely off cryptocurrency. I wrote a full article about this small beach town here.

Imagine an entire town without a commercial bank and the only ATM they have is a Bitcoin ATM. Everyone from the ice cream vendor to the hotel uses Bitcoin as the primary medium of exchange.

Amazing.

What is happening in Brazil

Recently,  Brazil has proposed into legislation the adoption of Bitcoin as legal tender, known as Bitcoin bill 2.303/15.

Brazil is the largest of the South American countries with over 170 million inhabitants. The population of the US is estimated at around 330 million inhabitants, Brazil’s population is almost half of the US.

While Brazil doesn’t have the individual net wealth as seen in the US, it does have a very large population to compensate.

If the majority of the Brazilian population transition to using Bitcoin as their daily medium of exchange, this can have a staggeringly positive effect on the price of Bitcoin, not to mention increase international confidence in its use as legal tender.

What is happening in other Central and South American countries?

There is increasing interest in Panama following El Salvador’s lead as well as Paraguay.

There are also rumors of Mexico, Venezuela, Nicaragua and possibly even Argentina showing interest. However, at this time no official sources have reported on it.

The Future of Cryptocurrency:

These trends are formable. Government policy is likely the biggest influencer,  either encouraging or discouraging the adoption of cryptocurrency.

With El Salvador, we have seen an entire nation of people adopt Bitcoin. In the meantime, America is legislating to criminalize, further tax and otherwise discourage cryptocurrency adoption.

It now looks like Brazil will be the next country to follow in the footsteps of El Salvador. I am sure Brazil won’t be the last.

While the world watches El Salvador and now Brazil and with rumors of other Central South American countries considering doing the same, Latin America may very well be home to the most widespread cryptocurrency adoption and use in the world.

Maybe I am biased, but I have already made the move south of the border.

~ ¡Viva la Crypto!