El Faro, a Latin American digital newspaper reported on Friday that El Salvador is studying the possibility of issuing a cryptocurrency. The report further explains that the brothers of the President of El Salvador, Nayib Bukele, are leading the project. The two, Ibrajim and Yusef Bukele, who are supposed to represent the president, have been meeting with foreign investors. The cryptocurrency is a stable currency called ‘colón dollar’.
The new developments come amid concerns over the country's planned adoption of Bitcoin as legal tender. As reported by Crypto Report, JPMorgan is one of many organizations that have questioned the validity of the decision. According to the investment bank, Bitcoin is likely to fail as a medium of exchange due to its lack of liquidity and the limiting nature of Bitcoin's volume.
Regardless, the country is moving forward and the law will take effect in September. With a dynamic, young and innovative president, El Salvador will become the first country to convert Bitcoin into legal tender. In September, when the law takes effect, all Salvadorans will be legally required to accept Bitcoin as payment for goods and services rendered.
However, the president is likely looking to supplement Bitcoin with a native cryptocurrency. To achieve this, the newspaper ensures that those involved in the project have met with representatives of Cardano, Algorand and WhizGrid at different times. The newspaper also requested comment from the government spokesman who refuted the claim saying the plan was "scrapped."
El Salvador will become the second Latin American country to launch a cryptocurrency. In 2017, Venezuelan President Nicolás Maduro launched the country's native token called Petro. The cryptocurrency is supposed to be backed by the country's oil and mineral resources. Additionally, the government planned to use it to help the nation bypass US sanctions. Unfortunately, due to poor governance, the project has largely failed.
Weiss Cryptocurrency Ratings reviewed Petro's whitepaper and revealed that there was no method on how Petro's price would be based on oil or mineral, and as such stated that the coin "is a worthless token."