Growing up in a rural town of 700 people, the odds of me talking with a member of parliament were slim at best—let alone talking with them about monetary systems, policy, remittances, GDP growth, etc.
But there's one conduit that led to my discussion with Lord Fusitu'a and it's Bitcoin BTC/USD. And through that discussion, I learned exactly why he drafted a proactive bill aiming to help the citizens of Tonga better their lives through Bitcoin adoption.
A Look at the Kingdom of Tonga
Tonga is an island nation comprising more than 170 islands in the South Pacific. Spread over an area the same size as Japan, Tonga lays just east of Fiji, south of Samoa, and is 2,000 km northeast of New Zealand.
Tonga is one of two Kingdoms in the world to never have been colonized so ancient noble bloodlines still exist today. A testament to its people, Tonga is commonly referred to as "the friendly islands."
The Tonga political structure was modeled after the UK system that has a House of Lords and a House of Commons, except Tonga practices a unicameral parliament that combines government in a single house.
Meet Lord Fusitu'a
Lord Fusitu'a is a Tongan Noble, politician by career, and barrister and attorney by vocation. By his own description, he has, "always been a bit of an IT/computer nerd." Knowing this, a relative of his in the US called him in 2013 to tell him about a new technology called Bitcoin.
A few years later, Lord Fusitu'a invested money with a businessman claiming to buy Bitcoin on his behalf, only to have the man disappear without a trace. In 2019, when Lord Fusitu'a had to be airlifted for a lifesaving surgery in New Zealand, he found time to immerse himself into Bitcoin and blockchain during his recovery. He was amazed at the technology.
"Once I understood the technology, it became apparent that as a store of value, it's the most pristine, hardest money and asset that mankind has ever created for the developed world. But for the developing world, it can be life changing right now."
Since then, Lord Fusitu'a has become a diehard Bitcoiner, and aims to use the technology to help Tonga as a developing nation. He was kind enough to do a Q&A with me about Bitcoin and how it can improve the lives of many people in Tonga, and even enhance the global monetary system.
Q: Have the locals started downloading Strike or other wallets and looking into BTC for remittances?
A: No downloading Strike yet, as it's not currently available outside the US. But its implementation is what will free us of remittances. We are using Muun Wallet, Blue Wallet and Wallet of Satoshi for now as well as sending remittances on layer 1 to Warm Wallets.
Q: Do you have a group of people in Tonga driving BTC adoption, like Bitcoin Beach did in El Salvador?
A: I do have a team of people going out to villages to discuss anticorruption and financial literacy as a foundation for understanding Bitcoin, and then Bitcoin proper.
Q: Let's say the Bitcoin bill, as you have amended it, passes. How will life change in Tonga?
A: Effects of proposed bill:
1. Adding 30% of every remittance, and thus disposable income, back into the pockets of every remittance receiver (most of the population) by using Strike or other lightning wallets. This is a commercial solution using an app on everyone's phone since an app at the point of sale doesn't require an Act of Parliament. Because our GDP is 40.1% remittance dependent, it's adding 30% to that 40.1% of the GDP to the tune of over $60m.
2. In our country, the government charges a 15% Goods and Services Tax on everything. So, if everyone has 30% more disposable income, they're paying 30% more into that 15% the government collects, and therefore increasing the amount of taxation revenue.
3. Of course, increasing disposable income by 30% does not mean everyone will spend it. Some will spend a part and save a part; remembering they got by on 70% in the past, they will keep living on 70% and save say 15% and invest 15%. Even if they lose the 15% investment, this is money they never previously had so they are not worse off. Some will save the whole 30%. If they save it in Bitcoin rather than Fiat, they are laying the foundation for future financial freedom and generational wealth by saving when they have never afforded to have savings before. In addition, saving in an asset that appreciates on a CAGR year-on-year average of 200% per annum, increases their net worth when they'd previously been hand-to-mouth for generations.
Q: Could you share why Bitcoin's monetary system will beat the traditional monetary system? Or tell us why you favor it?
A: Bitcoin will beat the traditional money system by:
1. Converting the 40% who are unbanked in our country to bank users. Tonga lost its national bank a while ago. We now only have expatriate predatory commercial banks who tend not to give capital to the large part of our population who are artisanal farmers, fishermen, fine mat hand crafters and tapa cloth producers. Bitcoin will give these people a way to have a central bank in their pocket and get paid directly from the export markets to which they sell, peer-to-peer cross borders, in a nano second, effectively for free.
2. As with everywhere else in emerging markets, we have been negatively affected by the influence of the IMF and the World Bank. What they do is provide loans to developing nations but they attach conditions to these loans which most often are austerity measures to cut public spending. Thus, we cut wages to civil servants, which in 2006 caused the only riots in our country's history by disgruntled government workers who were upset about their wages being cut. So it causes social upheaval. Also, since they force you to suppress public spending, you don't get to develop secondary and tertiary industries, which forces, for example, Africa to remain a mine and South America, Asia, the Caribbean and the Pacific to be plantations that service the developed world.
This way, developed countries receive cheap raw goods to consume and then process into manufactured goods that they sell back to us at a profit, thus trapping us into a perpetual trade deficit. All while the loans trap us into a perpetual debt cycle. Further, our economists get trained in traditional Keynesian economics at first world universities, only to come home and take up positions as central bankers fostering relationships with their academic mentors who either transition to the IMF or World Bank or have influence there. Thus, our own economists as central bankers work in cahoots, either naively or deliberately, to help first world central banks exert their hegemony over us.
Bitcoin fixes this. We get to transact and save outside this generational cycle of oppression and lay the foundations for financial freedom and possible generational wealth. Choosing Bitcoin as a monetary system for us is not an attractive alternative—it is our only choice for survival.
Q: Is there anything the Bitcoin community can do to help expedite adoption in Tonga and help residents change their lives ?
A:
1. Lobby your politicians to be pro-Bitcoin. More adoption in the first world gives more validation and credibility to the large number of emerging market nations who will adopt it earlier than the G7 by necessity, like El Salvador.
2. Keep on operators like Strike to encourage them to support adoption as the commercial solution in Tonga.
3. The Bitcoin community has been awesome for this, but just as a reminder, keep advocating for adoption in Tonga on social media. Many on Bitcoin Twitter have our flag in their names and tweet about Tonga, such as Bitcoin Citadel. This is great and this support will help propel adoption.
4. Of course, you can send people sats to help them get off zero and begin their Bitcoin journeys.
Proactive Measures
Lord Fusitu'a aims to add Tonga to the list of developing nations using Bitcoin in some form or function to help their citizens. El Salvador recently made Bitcoin legal tender and added Bitcoin to its reserves. Other countries look to follow suit: Ukraine and Cuba just passed bills legalizing Bitcoin and digital assets, while Paraguay and Panama are redrafting bills to promote the adoption of Bitcoin.
It can be eye opening for westerners to put themselves in the shoes of the citizens of developing nations. For instance, developing countries spend $700 Billion USD per year in Western Union and Moneygram Fees.
Bitcoin can remove 99% of these fees. Plus it has money transferred directly to the recipient, saving time and energy. This also eliminates a third-party with a central point of failure, keeping the money in the pockets of those who need it most.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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