Bitcoin: adopted by the states of El Salvador, Bulgaria, Ukraine

Will cryptocurrencies at some point replace the regular currencies we have known for so long? and what will the thieves become? Unemployment.

The road paves by the small country of 6 million inhabitants of Central America.

El Salvador became the first country to adopt bitcoin as its legal tender. The country's president, Najib Bouke, had described bitcoin as "the fastest-growing way to transfer" billions of dollars in remittances and a way to avoid losing millions of dollars to intermediaries.

Remittances from Salvadorians working abroad account for a large part of the economy, accounting for almost 22% of GDP.

In fact, according to official data, in 2020, remittances to the country amounted to 5.9 billion dollars.

 "El Salvador will be the focus of the world; we will become more attractive for foreign investment," said a ruling party member.

Prices can be displayed in bitcoin, tax levies can be paid in cryptocurrency, and bitcoin transactions will not be subject to capital gains taxation. 

According to the passed bill, the exchange rate against the US dollar "will be set freely by the market."

The "digital bet" of Ukraine

Kyiv has 46,351 Bitcoin, or about $ 1.7 billion, or 1.2% of the country's GDP. More than 100 companies already operate in the cryptocurrency market in Ukraine.

A bitcoin mining plant is expected to be built near the Zaporizhzhia nuclear power plant on Ukraine's border with Russia.

Zaporizhzhia is Europe's largest nuclear power plant, but the plant to be built will focus on consumption rather than energy production.

Create bitcoin consumes a tremendous amount of energy from computers.

The plant will be a partnership between state-owned nuclear power plant Energoatom and H2, a private company, and will include a $ 700 million investment.

It may be a "recovery" effort for Ukraine, as it will use the Ukrainian nuclear industry, which has been linked to the destruction of the Chornobyl nuclear power plant for years now, for "good."

According to a new report by the cyber security company Hacken and the UVCA (Ukrainian Venture Capital and Private Equity Association), from July 2019 to June 2020, $ 8.2 billion in cryptocurrencies left Ukraine, while $ 8 billion entered the country dollars.

 The country's average daily volume of cryptocurrency transactions is around 150-200 million dollars.

"Ukraine will become one of the top cryptocurrency destinations in the world," Deputy Foreign Minister for Digital Transformation Alex Bornyakov told Foreign Policy. "Not many countries are cryptocurrency-friendly, so companies go to where they are." The official estimates that Ukraine will soon be able to host 2,000 companies active in the cryptocurrency market.

Bulgaria: 

The second-largest holder of bitcoin in the world

Sofia may have 213,519 bitcoins in its coffers, or about $ 7.6 billion, or more than 11% of Bulgaria's GDP.

It is the second-largest amount of bitcoin concentrated, as the first is in the hands of the man who created bitcoin, Satoshi Nakamoto.

The Bulgarian government announced that it acquired the cryptocurrencies after a police operation in 2017 aimed at locating a group of hackers who had committed heaps of cybercrime.

 The 23 Bulgarians arrested had accomplices in neighboring countries such as northern Macedonia, Greece, Romania, and Serbia.

However, in recent years, the Bulgarian government has yet to mention its bitcoins, so it is unknown if it still owns them and how it will use them.

Bulgaria is generally quite active in the FinTech industry, as well as in the cryptocurrency market. It often hosts conferences on cryptocurrencies and their evolution and has many crypto exchange companies.

 You can even find two-way cryptocurrency ATMs in some streets of the capital ( Sofia ); you can buy and sell cryptocurrencies.

Such as Bitcoin, Ether, and Litecoin, and redeem them in euros, dollars, and Bulgarian levs.

Future or past?

But according to Foreign Policy, when so many governments, experts, and even Musk decide that cryptocurrencies are too dangerous for the planet, does it make sense to invest - let alone a country - in them?

The Swiss canton of Zug thinks so. From February 2021, every citizen and business can pay taxes on cryptocurrencies.

Zug has long been known as a friendly site for the cryptocurrency market, as it has hosted 439 cryptocurrency companies since last September.

"Attracting cryptocurrency companies is a smart move by both Zug and Ukraine," Katarzyna Ciupa, a researcher and Ph.D. candidate in blockchain technology at the Warsaw School of Economics, told FP.

 "Cryptocurrencies are the technology of the future, and they came to stay."

Everything is changing rapidly, and the pandemic catalyzes all these developments.

Cryptocurrencies could not but follow or lead the global upheavals in the economy, currencies, and society.

We live in historical moments, and they are always of particular interest.