Bitcoin craze: Eight places that want you to spend your virtual currency

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BITCOIN

From tax payments to everyday purchases, digital cash is becoming increasingly adopted around the world

By Umberto Bacchi

TBILISI – (Thomson Reuters Foundation) – Cryptocurrencies are shifting from the fringes of finance to the mainstream, with big investors, companies and countries moving to embrace digital cash as an asset and a routine way to pay.

The Central African Republic (CAR) followed El Salvador to become the second country in the world to adopt bitcoin as legal tender on April 27, bringing the African nation – one of the world’s poorest – into the crypto limelight.

Bitcoin, the original and most popular cryptocurrency, surged to record highs last year, reaching a peak of more than $68,000 in November, in a push driven in part by big institutional investors who see it as a hedge against inflation.

As cryptocurrencies draw increasing interest from governments, local authorities and firms, here are eight places where virtual money is becoming part of daily life:

1. CENTRAL AFRICAN REPUBLIC

CAR has adopted bitcoin as an official currency, becoming the first country in Africa and only the second in the world to do so, according to the office of President Faustin-Archange Touadera.

Touadera’s chief of staff said the move was “a decisive step toward opening up new opportunities for our country”.

But two former prime ministers expressed concern it came without guidance from the Bank of Central African States (BEAC), which governs the regional currency adopted by CAR – the Central African CFA franc.

Despite rich reserves of gold and diamonds, CAR is one of the world’s poorest and least developed countries and has been gripped by rebel violence for years.

2. UKRAINE

In the midst of war, Ukraine legalised the crypto sector last month, creating a legal framework for cryptocurrency exchanges and crypto companies to operate in the county.

Since Russia invaded in February, the country has made an unprecedented use of cryptocurrencies to fund its military and humanitarian needs.

It has raised more than $100 million in cryptocurrencies after posting appeals on social media for donations in bitcoin and other digital tokens.

3. SAN SALVADOR – El Salvador

Since El Salvador became the first country to formally adopted bitcoin as legal tender year, people can accept payments in bitcoin or dollars on a government digital wallet app, and convert the cryptocurrency into dollars for cash machine withdrawals.

President Buckle said the move would help locals save on the $400 million spent annually in commissions for remittances but critics say it may fuel money laundering.

4. MIAMI – United States

The U.S. city of Miami has been courting crypto companies, and is looking to allow use of bitcoin to pay workers and taxes.

In November The city’s mayor, Francis Suarez, said he was to take his next paycheck “100% in bitcoin”.

5. ZUG – Switzerland

In 2020, the small canton of Zug announced it was to become the first in Switzerland to take tax payments in cryptocurrencies, saying it would accept bitcoin and ether from 2021.

Famed for the low taxes that have drawn multinational companies and hedge funds to its lakeside shores, the canton has turned itself into a hub for virtual currency firms in recent years becoming known as the “Crypto Valley”.

6. INNS- Canada

The town of Inns, north of Toronto, became the first Canadian municipality to accept bitcoin as a method of payment for property taxes in 2019.

The initiative started as part of a one-year pilot project with Toronto-based firm Coin berry. Bitcoin is still listed as a payment method on the town’s website.

7. NASSAU – The Bahamas

The Bahamas in 2020 become the first nation to roll out a central bank digital currency (CBDC)- the Sand Dollar -nationwide.

An increasing number of central banks plan to issue CBDCs, an electronic equivalent of cash, as they fear losing control of the global payments system to cryptocurrencies, which are typically not controlled by any central body. Central banks in Sweden, Canada, the European Union and England are testing or considering similar systems.

8. SHENZHEN – China

The People’s Bank of China aims to become the first major central bank to issue a CBDC.

In 2020, it concluded a large pilot project for a central bank-backed digital yuan, under which it distributed “red envelopes” – a reference to China’s traditional way of gifting cash – in the form of online wallets containing 200 digital yuan ($29.75) each to 50,000 randomly selected consumers.


This article was updated on Wednesday, 27 April 2022 to include CAR’s adoption of bitcoin as legal tender and updates on Ukraine and other countries.(Sources: Reuters, Thomson Reuters Foundation, Innisfil municipality, Zug canton)

(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths, Astrid Zweynert, Lin Taylor and Katy Migiro. Credit the Thomson Reuters Foundation)