What’s El Salvador’s next big move? Creating its own stablecoin

El Salvador is not done yet with its ambitious crypto “adventures.” 

After passing its Bitcoin Law, the first in the world — and introducing a government-backed wallet called Chivo — the Central American country is ready for another big move. 

The government recently announced that it is planning to create its own cryptocurrency to provide citizens additional options on digital currencies. 

Colón-Dollar

President Nayib Bukele’s two brothers, Ibrajim and Yusef Bukele, have already informed prospective investors about the country’s upcoming cryptocurrency, which will be called Colón-Dollar.

The crypto is planned to be released at the end of 2021, which will be just several months after the enforcement of the Bitcoin Law in September. 

The Colón-Dollar is expected to be produced by the Central Bank Reserve and would seamlessly work with Chivo, a digital product also made by the Salvadoran government. 

Springing back

It was also announced that Colón-Dollar will be backed by the U.S. dollar reserve, which can strengthen investors’ confidence in El Salvador’s cryptocurrency. 

Many analysts see the country’s latest move as an attempt to restore its capability to issue its own national currency. 

The Colón-Dollar decision is expected to receive mixed reactions and put again El Salvador in the spotlight. 

The last time the Central American country made headlines is when it passed its Bitcoin Law, which makes bitcoin its legal tender. 

One of the critics of this move is Steve Hanke, a John Hopkins University Professor of Applied Economics. The professor didn’t mince words by saying El Salvador’s decision was clearly “stupid.”

 

Image courtesy of Cointelegraph News/YouTube

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