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Friday, March 24, 2023

El Salvador: With stablecoin plans against bitcoin skepticism

The brothers of El Salvador’s President Nayib Bukele have presented plans to launch a stablecoin to foreign investors. The schedule is ambitious. In terms of Bitcoin acceptance, however, there is still a lot to be done among the population.

The government of El Salvador is pushing ahead with crypto adaptation. This not only includes the fact that Bitcoin will soon become the official national currency. Now the introduction of a local crypto currency in the form of a stablecoin is also on the agenda. The locals should be able to use this to pay for services. The brothers of El Salvador’s President Nayib Bukele have presented their plans to foreign investors. The Latin American digital newspaper El Faro published corresponding reports on Friday evening. 

With this currency, temporarily baptized the “Colón dollar”, the government of President Bukele plans to restore a key element of its monetary policy by the end of this year. Since the introduction of the US dollar as an official means of payment in 2001, there has been no national currency. The government’s plan also includes the use of blockchain technology. With their help, the administration would like to digitize a wide range of public and private documents. These include identity cards and title deeds. 

El Salvador offers financial inclusion to its citizens

On May 27 of this year, El Salvador’s President Nayib Bukele announced that Bitcoin would become legal tender . However, the approval of the population still leaves a lot to be desired, according to a recent survey . With the stablecoin, Bukele would pave the way for financial inclusion for his compatriots . Because 70 percent of all Salvadorans have no bank account at all, although the Internet is definitely on the advance in the Central American country and now more than half of the population has access to the World Wide Web. 

As El Faro writes, the President’s two brothers, Yusef and Ibrajim Bukele, met Jack Mallers, founder of the wallet developer Strike, even before the announcement. Mallers himself once spent three months in El Salvador. Strike’s CFO, Bob Scully, also attended the interview. Strike announced on May 5 that it would create the Salvadoran government wallet called Chivo , a slang term that roughly translates to “cool”. Just a few weeks after its launch in March, Strike has become El Salvador’s most popular app. However, Mallers still sees a problem with the adaptation:

The big hurdle we encounter, at least on the merchant acceptance side, is that they get a little nervous when we mention Bitcoin because they don’t know exactly how it’s regulated or whether they’ll do something wrong somehow. “

This ignorance is probably also behind the poor survey results mentioned above. In view of this, the schedule for introducing the “Colón dollar” this year seems quite ambitious. 

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