El Faro, a Latin American digital daily newspaper, reports that the El Salvadorean government has plans to create a local cryptocurrency that users would be able to spend for services.
According to the article, the brothers of the country’s president, Nayib Bukele, made a proposal to investors, who were informed that the new cryptocurrency, which is presently referred to as the Colon dollar, would be implemented by the end of 2021.
El Faro reports that the stablecoin cryptocurrency, which is preliminarily referred to as “Colón-Dollar,” is set to be launched before the end of the year by the Bukele government. Bringing back the power to create national currency is a critical step towards the country’s return to monetary policy which it lost when it accepted the U.S. Dollar in 2001.
Other ideas that were included in the government’s plan were the usage of blockchain technology to digitize personal ID cards and property deeds.
In addition to over two hours of video footage from virtual meetings, as well as numerous paperwork documents containing the details of President Bukele’s brothers, Yusef and Ibrajim, and a few of his closest advisors, all of which were collected from November of 2019 onwards, there is also video footage of the full rollout plan and timeline, which spanned two years.
According to a spokesperson for the president’s office, at least 50 individuals have taken part in the discussions, including top officials from the president’s office, foreign advisers, and private contractors.
According to the account, the president’s brothers say they represent him. The information on which the story was founded was also provided by El Faro. This announcement comes months after the country’s president’s bitcoin legislation was passed by the country’s parliament. Bitcoin is now legal tender and all companies will be required to accept it as payment for products and services by September.
According to the article, the president’s brothers had several meetings with representatives from Cardano, WhizGrid, and Algorand.
What is a Stablecoin?
A stablecoin is a new kind of cryptocurrency that aims to provide price stability by backing itself with a reserve asset.
Stablecoins have gained popularity since they aim to combine the best of both worlds: the fast processing and security or privacy of cryptocurrency payments, as well as the volatility-free and stable values of fiat currencies.
Stablecoins may be linked to a currency, such as the US dollar, or to the price of a commodity, such as gold.
The price stability of stablecoins is achieved via collateralization (backing) or algorithmic methods for purchasing and selling the reference asset or its derivatives.