Arizona Submits Bill to Make Bitcoin Legal Tender

All eyes were focused on the Federal Open Market Committee (FOMC) meeting last week as the Fed continued to battle rising inflation fears. Although no interest rate hikes were implemented, it was suggested that hikes are likely in March 2022. As cryptocurrency markets stabilized from the news, it was announced that the U.S. state of Arizona had submitted legislation to follow in El Salvador’s footsteps and make Bitcoin legal tender. Elsewhere, the CEO of Ripple, Brad Garlinghouse, provided an insight into the economic health of the company and Elon Musk tempted McDonald’s into a Dogecoin partnership. 

• Arizona state submits legislation to make Bitcoin legal tender
• New report suggests crypto users to hit 1 billion in 2022
• Musk challenges McDonald’s to use Dogecoin for payments
• Ripple valued at $15 billion after share buyback
• U.S. locks in an interest rate increase for March 2022

State Senator creates bill to make Bitcoin legal tender in Arizona

In one of the most unexpected moves of 2022 so far, State Senator Wendy Rogers submitted legislation to make Bitcoin a legal form of currency in the U.S. state of Arizona. The bill has been submitted even though, according to the constitution, individual states cannot propose their own legal tender. 

The new bill, SB 1341, will seek to add Bitcoin as one of the “instruments” for legal tender. If approved, citizens within the state will be able to use the cryptocurrency to pay for debts and taxes. The only country to enact such a law globally has been El Salvador. 

The bill first needs to pass the Arizona state senate, followed by the Arizona house before Governor Doug Ducey can sign it into law. 

In response to the news, Bitcoin bull, Anthony Pompliano, was quick to comment stating that “politicians around the world are waking up to the fact that Bitcoin is good for business. It’s good for your political campaign, it’s good for your constituents, it’s good for your private companies, and ultimately it’s good for your government.”

Rogers has not been the only U.S. State Senator to voice approval of using Bitcoin as legal tender in recent months. Don Huffines, the current candidate for Texas Governor, also wants to make Bitcoin legal tender if he is elected.  

During the same week, the IMF urged El Salvador to remove Bitcoin as a form of legal tender. So far, El Salvador remains the only country in the world to accept Bitcoin as legal tender and has been stockpiling Bitcoin as part of its treasury. Although the IMF has raised concerns, El Salvador has shown no signs of backtracking on the Bitcoin laws passed during 2021. Experts within the country believe that several other countries will follow in El Salvador’s footsteps during 2022.

Tucson, Arizona, downtown skyline at dusk

New report suggests crypto owners could hit 1 billion in 2022

A ‘Crypto Market Sizing’ report released by cryptocurrency platform, Crypto.com, has suggested that the number of global cryptocurrency owners could exceed 1 billion by the end of the year. The estimate is based upon the platform’s expectations for the adoption of cryptocurrencies by developed nations and via extrapolation of 2021 adoption figures.

According to the report, cryptocurrency ownership increased by 178% in 2021, rising from 106 million in January to 295 million in December. Much of this increase was attributed to an interest in Bitcoin. By extrapolating the increase to December 2022, the firm believes global users will hit 1 billion before the end of the year.

Looking ahead the reports states “nations can no longer afford to ignore the growing push towards crypto by the public. We may in many cases expect a friendlier stance towards the crypto industry. We expect developed nations to devise clear legal and taxation frameworks for crypto assets.” 

Musk challenges McDonald’s to use Dogecoin for payments

Elon Musk, the CEO of Tesla & SpaceX, has publicly tempted McDonald’s into accepting Dogecoin payments by stating he would eat a happy meal on television if the company agreed. Musk has been a long-term supporter of the meme cryptocurrency believing that it is far more suited to transactions than Bitcoin.

Musk tweeted the tempting offer on Tuesday, which was met with a quick boost to Dogecoin prices. Fans of Dogecoin were quick to comment that they would be more likely to eat at the fast-food chain if DOGE payments were accepted. 

Tweet from CEO of Tesla and SpaceX, Elon Musk

The official Twitter account of McDonalds replied to Musk’s tweet later the same day. The company said that it would accept DOGE if “Tesla accepts grimacecoin.” Grimacecoin is related to the character, Grimace, who is a friend of Ronald McDonald in McDonald’s commercials.  

Earlier in January Tesla began accepting DOGE payments for specific pieces of merchandise that can be purchased from the company’s online store. 

Ripple secures $15 billion valuation with share buyback

Ripple, the company behind XRP and the XRP Ledger, confirmed last week that it had completed a buyback of its Series C shares due to an extremely successful year. Although the company is being targeted by the SEC, Ripple enjoyed one of its best years on record in 2021.

The news was confirmed by the CEO of Ripple, Brad Garlinghouse, via Twitter, who explained that Ripple’s financial position was the strongest that it had ever been. According to the tweet, the company currently has over $1 billion in the bank. 

Tweet from CEO of Ripple, Brad Garlinghouse

Series C shares raised $200 million for the company in 2019, with the round of funding being led by Tetragon, SBI Holdings, and 66 Ventures. According to reports, with the latest buyback of these shares, the company’s valuation has increased to $15 billion.

In addition to the share buyback news, Garlinghouse went on to explain that progress was also increasing with RippleNet and RippleX. According to Garlinghouse RippleNet is far more than just a cross-border payment system and currently boasts a $10 billion volume run rate. The company’s vision is to use RippleNet to bring native services, such as liquidity, to enterprises. 

With regards to RippleX, Garlinghouse then described that it was “full steam ahead on establishing a multitude of capabilities to the XRP Ledger – NFTs, CBDCs, interoperability bridges, sidechains and so much more.”

U.S. locks in an interest rate hike for March 2022

On Wednesday, Federal Reserve Chair, Jerome Powell, confirmed that the central bank was “of a mind” to increase interest rates in March. A rise in interest rate has long been speculated as a way to fight the ongoing inflation fears. 

Results from the January FOMC meeting have been anticipated by investors since December, when Powell first mentioned a reduction in bond purchases and the potential for a 2022 interest rate hike; both elements that the Fed believes are required to fight the 40-year high inflation figures. This uncertainty has resulted in many risk-on assets, such as cryptocurrencies, experiencing a 50% decrease in value since early December. 

Although some experts feared an interest rate hike was coming in January, according to the Fed it is now more likely this will take place in March. However, it is still unclear how high the rate increase will be which has left some uncertainty in the markets. 

The Managing Director of crypto fund manager 3iQ Digital Assets, told MarketWatch “I think investors will take a breath right now after Powell’s remarks. But that question of how soon and how much will the Fed move, it’s still out there. I think in the near term, you’re gonna have more continued asset price volatility across all asset classes, and bitcoin and crypto are going to follow suit.”

With the lack of sentiment change, cryptocurrency markets stabilized after the meeting, with Bitcoin settling between $36,000 to $38,000 for the remainder of the week.  

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