El Salvador, July 17, 2021 /AlexaBlockchain/ – El Salvador is planning to launch a national stablecoin cryptocurrency – “Colón-Dollar” – by the end of this year, reports El Faro.
The government’s plan also included the use of blockchain technology to digitize a wide array of public and private documents, including personal ID cards and property deeds.
El Salvador Becomes First Country To Adopt Bitcoin As A Legal Tender
El Salvador last month passed the new ‘Bitcoin Law’ to become first country in the world to adopt Bitcoin as a legal tender. The launch was praised by the crypto community; however, it did not go well with global monetary authorities.
The International Monetary Fund (IMF) expressed concern over the Bitcoin adoption as a legal tender saying that it has a number of economic and legal concerns regarding the move from El Salvador to make bitcoin a parallel legal tender.
The World Bank also rejected a request from El Salvador to help with the implementation of Bitcoin as legal tender.
The Central American Bank for Economic Integration (CABEI) has supported El Salvador move and it will provide technical assistance to El Salvador to implement Bitcoin as a legal tender in the country.
Meanwhile the country is moving ahead with the implementation of Bitcoin as a payment system in the country and the government has decided to give each citizen $30 in bitcoin to incentivize use of the crypto wallet.
Motivation for A National Stablecoin Cryptocurrency
The launch of national digital currency would restore a key element of monetary policy which the country lost when it adopted the U.S. Dollar in 2001: the ability to issue national currency.
The implementation of Bitcoin is still in progress and whether it will benefit the country as expected remains to be seen. Meanwhile, majority of public in the El Salvador is not so comfortable with the Bitcoin idea. According to a survey, Many Salvadorans seem to be not so in favor of bitcoin, despite their government recently adopting the cryptocurrency as legal tender.
Conducted by pollster Disruptiva, which is affiliated with Francisco Gavidia University, the survey found that about 54% of people viewed the bitcoin adoption as “not at all correct” while another 24% described it as “only a little correct.”
The launch of a national stablecoin cryptocurrency or a CBDC might be effective in addressing concerns from public who are worried due to Bitcoin price volatility and global financial authorities who are not so open to a public cryptocurrency like Bitcoin.