Honduras Says It Plans To Follow Its Neighbor El Salvador In Making Bitcoin Legal Tender

honduras bitcoin

Honduras may be the next country to adopt Bitcoin as legal tender – a move that would shake the old establishment.

Bitcoin bull Max Keizer initially, rumors of this happening were circulating in a tweet posted last Friday. It read ‘It is happening…’, accompanied by a picture of the flag of Honduras.

According to Bitcoin Lightning Network+the president of Honduras Xiomara Castro said El Salvador cannot be the only country to get rid of the dollar’s hegemony.

“We must not allow El Salvador to be the only country to escape dollar hegemony. Honduras has the right to go to the countries of the First World.

Bitcoin is increasingly seen as an escape from the dollar

They say that all fiat currencies eventually go to zero. History shows that rampant debt and currency devaluations only end one way.

Recently, cracks in the dollar’s dominance have become even more apparent. As unpopular as it may sound, we may be witnessing the end of the dollar in real time as entities look to alternatives.

For example, talks between China and Saudi Arabia to trade oil in yuan have gained momentum over dissatisfaction with US security obligations to the Saudis. If successful, the move would seriously damage the dollar’s oil market dominance.

In addition, Russia is increasingly turning to the yuan in response to sanctions related to the war in Ukraine. Russian companies are reportedly trying to open yuan accounts to maintain cash flow.

However, James Fok, author of the book Financial Cold War: A View of Sino-US Relations from the Financial Markets, says that despite the dollar’s apparent flight, the yuan is not likely to overtake the dollar any time soon. Fok says China’s tight capital controls and rule of law make the yuan unattractive against the dollar.

But that doesn’t mean the renminbi will suddenly compete with the dollar in any meaningful way. To do that, you have a lot of other pieces that have to fall into place.”

Nevertheless, the rise of Bitcoin offers an alternative to both the yuan and the dollar. Plus, the fixed stock means it can’t be blown to zero. Moreover, because it is apolitical, it also has appeal based on the avoidance of quarrels between factions.

How might price react if Honduras goes ahead?

When El Salvador made Bitcoin legal tender on September 7, 2021, $BTC experienced a 20% downward move to a low of $42,800.

This set off a downward trend for the rest of September, reaching a local low of $39,500 before bulls broke the downtrend and hit a new all-time high of $69,000 some six weeks later.

Based on the idea of ​​Bitcoin government approval, Sept. 7 was expected to primarily be a catalyst for a move higher. Instead, the flash crash defied expectation. Co-Founder of Onchain Capital Ran Neuner suggested foul play at the hands of legacy institutions.

Nevertheless, based on a sample of one, a country that makes Bitcoin legal tender is likely to drive the price down, at least in the short term.

For now, all eyes are on Honduras.

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