According to San Salvador-based media outlet El Faro, El Salvador’s government intends to establish a native cryptocurrency that the public will be able to use to pay for services. Ibrajim and Yusef Bukele, the brothers of the country’s president, Nayib Bukele, informed prospective investors that the cryptocurrency, now known as the ‘Colón-Dollar,’ might be released by the end of 2021. Earlier, El Salvador passed a bill authorizing bitcoin as an optional legal tender.
El Salvador’s central bank will issue the stablecoin.
The Colón-Dollar, the Salvadoran government’s stablecoin, would be produced by the Central Reserve Bank, backed by a reserve of US dollars, and connected with the government wallet, Chivo. In order to encourage its usage, Ibrajim indicated in his meeting with stablecoin specialists on June 4 that the government will begin by creating a reserve of dollars to support the Colón-Dollar. The announcement comes only weeks after the Central American nation’s government unanimously passed the president’s Bitcoin law, making the leading cryptocurrency legal tender and requiring all companies to accept it as payment for products and services.
El Salvador continues to receive criticism from global financial regulators.
Earlier, a group of citizens joining forces with the political party Farabundo Martí National Liberation Front (FMLN) has filed a lawsuit claiming El Salvador President Bukele’s Bitcoin adoption program is unconstitutional. The Central American country passed a law authorizing bitcoin as legal tender in the country. The adoption of bitcoin as a legal tender got all the praise from crypto enthusiasts around the world, but it did not sit well with global regulators. Earlier, the World Bank refused El Salvador’s request to help the country’s transition to adopt Bitcoin as legal tender.