The UAE is going to be the first country to follow El Salvador by making bitcoin legal tender.

The reason President Bukele made bitcoin legal tender is because he understands how fragile the US dollar system is and he doesnt want his citizens reliant on the dollar. He constantly talks about the fact nothing backs the US dollar.

El Salvador had their national currency pegged to the US dollar between 1993 and 2000, and from 2001 they became completely dollarized using the US dollar as their legal tender.

Bukele knows that the US dollar is toast. There is going to come a time soon when confidence in the US dollar dissapears seemingly overnight as all countries decide they do not want to hold US government bonds. This will cause a sovereign debt crisis and a significant collapse in the value of the dollar and Bukele does not want his citizens to be relying on the dollar as legal tender when that happens. This is why he gave his citizens a sound money alternative in the form of bitcoin as legal tender, so when the dollar starts to collapse it will be easy for his citizens to transition to bitcoin. The entire country will be able to move from the dollar standard to the bitcoin standard within a week because all the infrastructure is already in place.

We all know Bukele has been spending time with Qatari and Emirati government officials no doubt discussing trade in bitcoin and his venture into making bitcoin legal tender. Why is this significant? Both Qatar and the UAE have their national currencies pegged to the US dollar both at roughly 3.65 riyals/dirhams to the US dollar.

This makes their currencies susceptible to any problems with the US dollar meaning a US sovereign debt crisis and subsequent currency crisis would cause their national currencies to collapse and their economies to crumble beacuse of it.

When the UAE and Qatar pegged to the dollar back in the 1990s they did it because the dollar was considered the strongest currency due to its reserve currency status. That is no longer the case in fact using the dollar or pegging your currency to the dollar now comes with massive risk.

The Qataris and Emiratis know this and they know they need a solution because they do not want their economies crushed by a dollar crisis.

I have no doubt in my mind they are looking at many different options from gold to BRICS to IMF SDRs, but all have massive flaws in terms of political risk, centralisation risk and settlement risk. Meanwhile bitcoin has no political risk, no centralisation risk and no settlement risk.

The fact they are meeting with Bukele tells me they are considering making bitcoin legal tender in exactly the same way he has done, as a way to give their citizens and residents a way to sidestep the pain of a dollar crisis when it happens and easily transition to an alternative system helping their economies stay strong instead of collapsing alongside a collapsing US dollar.

Countries like the UAE are going to be the next to follow El Salvador in making bitcoin legal tender as a way to give their citizens and residents a sound money alternative in the event the US dollar has systemic issues, and by extension that will insulate their economies from the pain of a collapsing US dollar.

El Salvador has the laws and infrastructure in place to allow their citizens the ability to transition to the bitcoin standard within a week if they need to. The UAE wants similar laws and infrastructure in place as a way to protect their citizens and economy if the US dollar experiences systemic issues, and the first step to achieving this is by making bitcoin legal tender in law.