The El Salvadoran authorities are planning to develop a unique digital currency to be utilized by the community within the country as a method of payment against the goods and services, as stated by El Faro, a media outlet based in San Salvador, on Friday.
El Salvadoran president Nayib Bukele’s brothers Yusef and Ibrahim Bukele disclosed to the prospective businesspersons the possibility of the cryptocurrency called Colon-Dollar being launched by the denouement of 2021.
In the article featuring the brothers, which contained the video recordings of both of them presenting their discussion about the framework of the project, it was mentioned by them that they were speaking on behalf of the president. The footage of more than two hours extracted from the virtual meetings of the Bukele brothers, along with documents registering Yusef and Ibrahim, were published by El Faro.
El Salvador’s stablecoin
The stablecoin of El Salvador is known as colon-dollar, which would be developed by the country’s central reserve bank and supported by the reserve stock of United States dollars as well as linked to Chivo (a digital wallet issued by the government).
For the encouragement of the investors, Ibrahim claimed in his video conference with the specialists of stableoins on 4th June that the commencement of the project would be done through collecting a sufficient stock of dollars for backing Colon-Dollar.
The declaration about the launch of the stablecoin was made some weeks following the unanimous approval of the BTC law of the Salvadoran government, making Bitcoin a legal tender and demanding all the firms to accept BTC for the payment of services and products.
It was informed by a spokeswoman of the government to the news outlet of Latin America that the plan was rejected. Nonetheless, the publication which cites an anonymous source claimed that the arrangements for the program are being scheduled systematically.
A significant move in monetary policy
The step would bring back the capability of the country to launch its national currency (lost by El Salvador since it accepted US Dollar during 2001). On the other hand, an Applied Economics Professor from John Hopkins University named Steve Hanke has alarmed the country against its choice to accept Bitcoin legally by revealing that it is an economic stupidity and would have serious consequences.