[ad_1]
A former member of Tonga’s parliament backs the proposal to make Bitcoin (bitcoin) modelled on the fiat currency of Tonga, a small Pacific nation of El Salvador. It will go to a vote in parliament in May, and early signs are encouraging.
Mata’i’ulua ‘i Fonuamotu, Lord Fusitu’a, told Cointelegraph there are plans to use the state-run volcano mining facility to create wealth in Tonga.
Tonga has 21 volcanoes. “That means one volcano for every 5,000 people.” He owns one volcano through his family’s hereditary land rights.
The proposed bitcoin mining operation will use the volcano’s geothermal energy to generate electricity.
“Serving 5,000 people requires 2 megawatts of electricity. So 40,000 megawatts will serve the entire national grid. Each volcano produces 95,000 megawatts at any one time, leaving a lot of leeway,” Lord Fusitu’a Say.
“We will have hash huts for every family. However, it’s only 20,000 units because there are only 20,000 families.”
He suggested that each volcano could generate $2,000 a day in bitcoin, “gifted” to each family by the Tongan government.
For an island with a population of 120,000, economies of scale are important and ordinary people will benefit greatly.
Tonga needs $26 million in cables to build and operate, but the World Bank says Tonga has no collateral for the funds.
Nonetheless, Tonga managed to raise funds through grants from the least developed countries. Given Lord Fusitu’a’s influence in local politics – and the fact that he claims to own a volcano – he may succeed.
Lord Fusitu’a also claimed to have negotiated a free offer for the mining technology, but he did not disclose the terms of the deal. Chinese companies such as Bitmain have a large market share in this area. Refugee mining operations under China’s recent ban are also likely to travel to Tonga. For now, this remains a mystery.
“The math doesn’t change for a nation-state. The best is for a nation to own its own mining.”
related: Tonga will copy El Salvador’s bill to make bitcoin legal tender, says ex-MP
Who is Lord Fustua?
Lord Fusitu’a was a barrister before becoming a statesman and a member of the Tongan nobility.
Tonga is the only country in the South Pacific to retain an Aboriginal monarchy. Although it is a member of the Commonwealth, it did so voluntarily in 1970. Despite historical pressure from imperial states, Tonga has never been colonized.
Lord Fusitu’a has decided to resign as MP in November 2021 after recovering from surgery for a serious medical condition and living in New Zealand for three years, especially as Tonga closes its borders due to COVID-19. However, his cousin already has a seat in Tonga’s parliament, so his domestic legislative agenda remains the same, according to Lord Fustua.
Two clinical deaths from injuries inform his ambitious agenda Global Parliamentarians Anti-Corruption Organization, which includes anti-corruption legislation and gender empowerment and climate change policies.
When he spoke to Cointelegraph, as is common after a series of surgeries, he was shirtless and covered in tattoos (the Tongan word for Captain Cook’s destruction) depicting his family’s thousand-year-old tattoo history.
Lord Fusitu’a has been a “bitcoin-only man” since 2013, but “don’t let the looks fool you:” he started coding when he was 8 years old.
When he couldn’t speak or swallow, he was stuck in the hospital and could only read when he reaffirmed his enthusiasm. Reread every printed word about Bitcoin.
Lord Fusitu’a, who is very visible in online bitcoin circles, is lyrical about why a country that relies so heavily on remittance payments should adopt bitcoin.
“This is the most solid money ever made. It is a combination of digital scarcity and a decentralized distributed ledger. The most democratic egalitarian currency on earth. This is sound money, the most primitive asset ever created. A year-on-year appreciation of 200%. As a store of value, it is the asset of the highest creditor. “
“But if you’re in a country like El Salvador or Tonga that relies on remittances, life changes instantly. For a country ravaged by hyperinflation like Nigeria or Venezuela, you need a trolley of currency to buy a loaf of bread […] This could be a survival mechanism for the 4 billion poor,” he said.
plan
Fusitu’a explained to Cointelegraph his four-part plan to change the way Tonga’s economy works.
The plan includes educating Tongans financially on bitcoin remittance payments, making bitcoin legal tender, establishing a bitcoin mining operation in Tonga, and creating a Tongan bitcoin treasury.
A key part of the plan revolves around financial education for Tongans whose economy is most dependent on remittances.
Lord Fusitu’a said he Tired of families in developing countries losing so much much-needed income from middlemen when sending money home.
According to Lord Faustua, about 40% of Tonga’s national economy is based on the repatriation of almost 300,000 overseas workers from the diaspora back to the country. They sent money back to the island’s population of about 120,000. With the Tongan diaspora population more than doubling, remittances are vital to the national economy.
He claimed Tonga’s “2020 GDP is $510 million, of which 40% is just over $200 million. So 30% or $60 million of that is just a fee to send money to Western Union.”
Lord Fusitu’a believes free bitcoin transactions will increase everyone’s remittances by 30%, as Western Union charges villagers a 30% commission, although a calculator on the Western Union website shows the fee is closer to $3 transfer $100 deal.
However, Lord Fusitu’a said that this does not account for the fact that:
“The $2.90 for $100 shown on the website does not indicate a minimum fee of around 10-25% for all transfers, depending on where you send the money, it doesn’t show on the website. The average amount when you send money from El Salvador or Tonga is $50 By $100, your remittance is a big chunk of it. It also doesn’t indicate that you will be charged for FX slippage for buying AUD, converting it to Tongan Pa’anga and buying TOP.”
Tonga has already started a financial literacy and ‘how money works’ education programme in 2021, with a team for community outreach. What does a “how money works” discussion look like? simple:
“People understand the three-hour trip and the $20 round-trip ticket. Queue at Western Union to pay high money transfer fees. $70 on the counter, not the $100 they thought they’d get. Then there was the beggar tax because beggars sat Outside. Three hours each time you go back to the village, you work 9 hours a day, you come home tired and hungry, and you lose money transfer fees and bus fares, just to get $40-50 from the initial $100 wire transfer.”
related: Crypto Remittances Are Adopted, But Volatility Could Destroy Deals
Importantly, Tonga has a high rate of mobile-first internet adoption.
“An internet-connected phone can instantly change lives,” said Lord Fusitu’a. For the unbanked, “a cell phone and a warm wallet is their first time participating in any financial system.”
Wallets like Moonwallet that don’t know your customers can help Those without ID. “This has nothing to do with the Bitcoin brothers, this is a viable mechanism for the billions of the world’s unbanked poor. $200 billion of the $700 billion in lost remittance fees globally hurts the average household every year.”
Furthermore, in 2005, Tonga imposed a 15% Goods and Services Tax (GST) instead of income tax, which further penalised the poor. If Bitcoin were adopted, more money in the pockets of ordinary Tongans – and less money in Western Union – would also benefit government coffers through GST.
Lord Fusitu’a also provides weekly Bitcoin basics lectures in Tongan.
fiat currency notes
Lord Fusitu’a considered El Salvador’s Bitcoin bill legal tender before its release and tried to pass it “almost a copy.”
Tonga’s bill, which has been in place since July 2021, would make bitcoin legal tender along with Tonga’s currency, the pa’anga.
Like Article 7 of El Salvador’s controversial Bitcoin law, the bill would mandate the acceptance of Bitcoin when offered.
The bill will be tabled at the next parliamentary session in May 2022. To pass, it needs to be approved by a majority of at least 14 of the 26 members of parliament.
The nine council members are hereditary lords who “vote collectively” and are said to “always” follow Fustua’s lead as the only lawyer and barrister in the council. Three other elected members have exposure to Bitcoin. Only 2 out of 14 votes are needed to make a majority.
Lord Fusitu’a expects that if the bill is passed into law, there will be a natural increase in remittances from the Tongan diaspora. He mentioned that Bitcoin remittances returning to Tonga in 2021 have increased.
It is pegged to five currencies, which are artificially low to protect exports of its main product, but that makes imports expensive.
related: El Salvador: How it started and how it relates to Bitcoin law in 2021
Bitcoin Treasury
The final part of Lord Fusitu’a’s four-point bitcoin plan is to create a treasury of bitcoin as a hedge against inflation. The Lord’s idea of Bitcoin’s utility contributed to this controversial decision in traditional economic policy.
“Emerging markets have traditionally held ‘melting at 5% per annum’ dollar, ‘depreciating at 2-6% per annum’ gold and ‘negative yielding since 2008’ U.S. bonds. We do the same. If We moved the $700 million treasury to BTC in March 2020, and by February 2021, they will be worth $22.5 billion.”
“With a GDP of $510 million in 2020, $22.5 billion is equivalent to 45 years of Tonga’s economic productivity in 11 months,” he said, adding, “When Nayib Bukele teased him on Twitter’ When he buys the dip’, he means that every time he buys, he transfers his treasury from the assets of the three dead to BTC.”
Buchler’s decision has been criticized, but part of that criticism stems from the nature of his governance. Lord Fusitu’a’s track record of involvement in multinational groups shows that he prefers to work with international organisations to secure his country’s economic future.
what’s ahead?
But, since it’s so obvious, why don’t other countries follow his logic? “They saw the logic, but it was funded from traditional finance,” Lord Fusitu’a said.
Palau, another Pacific island, is launching a stablecoin on Ripple Ripple. “Are they crazy? Their approach is more popular because the collaboration with XRP and Ripple includes traditional financial rails.”
International monetary policy risks in Tonga remain. In October 2021, the internal IMF released a report acknowledging that the crypto ecosystem could replace the official currency of “unbanked” emerging economies unless regulators ensure financial stability. However, perhaps this is a sign that the IMF is looking at Tonga.
Lord Fusitu’a is optimistic about fiat currency and bitcoin mining plans. “The Bitcoin community loves seeing the losers win.”
Like many in the crypto space, Lord Fusitu’a is either a genius or a great performer. or both.
[ad_2]
Source link
