El Salvador made history in 2021 when it made Bitcoin (CRYPTO: BTC) legal tender within its borders.
This week its authoritarian president Nayib Bukele tweeted that he expects two more countries would do the same in 2022.
But he's not the only one who thinks this, with finance expert deVere Group chief Nigel Green agreeing with the eccentric Central American leader.
"I would go further still than he did," Green said.
"I believe that it's likely that three more nations will follow El Salvador's pioneering, future-focused lead into the digital age."
Image source: Getty Images
Bitcoin could replace US dollar as stable currency
For many decades, citizens in developing nations have used the US dollar as a stable currency — as opposed to the local fiat that could dramatically change in value overnight.
But Green pointed out that that practice can trigger other consequences.
"Reliance on another country's currency also comes with its own set of, often very costly, problems," he said.
"A stronger US dollar, for example, will weigh on emerging-market economic prospects, since developing countries have taken on so much dollar-denominated debt in the past decades."
It's no wonder that low-income nations would thus consider adopting Bitcoin as an international currency with limited supply.
"By adopting cryptocurrency as legal tender, these countries then immediately have a currency that isn't influenced by market conditions within their own economy, nor directly from just one other country's economy," said Green.
"Bitcoin operates on a global scale and therefore is impacted by wider, global economic changes."
Which countries might make the leap in 2022?
Green mentioned several candidates that could elevate Bitcoin to legal tender status in the coming months.
They are all located in El Salvador's part of the world: Panama, Paraguay, Guatemala and Honduras.
"Just after El Salvador's adoption back in September, Panama announced a bill to make the cryptocurrency legal tender in the country," said Green.
"Also, congressman Gabriel Silva tweeted that this could create jobs in Panama and lure investment from other nations."
In Paraguay, a bill to regulate crypto trading and mining was recently passed.
"Is this the first step to making Bitcoin legal tender?"
According to Green, Honduras and Guatemala are currently researching central bank digital currencies.
"However, I think they will ultimately embrace an existing cryptocurrency as a legal tender, as El Salvador has done."
Once the second and third countries follow El Salvador, Green feels like there will be "a snowball effect" for legal tender adoption around the globe.
Bitcoin to hit US$100,000?
In his English language tweet, Bukele also predicted that Bitcoin would reach US$100,000 in 2022. It was at US$46,199 on Tuesday afternoon Australian time.
He also forecast that Bitcoin would "become a major election issue" at the mid-term elections in the US later this year.
Many people in poorer nations do not have bank accounts out of a distrust of unreliable financial institutions.
According to Green, cryptocurrencies could assist those economies to "bolster financial inclusion for individuals and businesses."
"I'm confident that the young, maverick President, Nayib Bukele, is correct about other countries adopting Bitcoin as legal tender in 2022."
