Representatives of the Salvadoran government had previously held a meeting with the International Monetary Fund (IMF). The country had already requested help from another bank to adopt Bitcoin (BTC).

In recent days, the government of El Salvador asked the World Bank for technical advice to adopt Bitcoin (BTC) as legal tender. Salvadoran Finance Minister Alejandro Zelaya said that the request seeks to design a framework of action that allows implementing the cryptocurrency properly.

The official noted that he held a meeting with representatives of the International Monetary Fund (IMF) to discuss the Bitcoin Law. Zelaya reiterated that El Salvador will use BTC as an alternative to the US dollar rather than as a replacement.

The minister stated that they have requested technical assistance from both the World Bank and the Central American Bank for Economic Integration (CABEI). He said that they want those organizations to accompany El Salvador in the implementation and regulation of Bitcoin as legal tender.

El Salvador Asks Two Organizations for Advice on Bitcoin

Before asking the World Bank for advice on Bitcoin, El Salvador had talked to another multilateral organization. In recent days, the president of the Central American Bank for Economic Integration, Dante Mossi, spoke about it. He stated that he had received a request for technical assistance from the Salvadoran government.

Mossi confirmed a few days ago that CABEI has not yet begun to provide advice to the Salvadoran government. The bank in question is looking for “experts” in Bitcoin to form a task force to help the economic cabinet.

Curiously, the government is asking banks, regardless of their nature, to help them adopt Bitcoin. In the past, these types of financial institutions have questioned the pioneering cryptocurrency and its scope as a store of value.

Both CABEI and IMF Support the Adoption of Bitcoin

CABEI supports the decision of the President of the Republic, Nayib Bukele, to adopt Bitcoin as legal tender. The position of the IMF representatives is similar to that of this institution, since they are not against the measure either, according to Zelaya.

El Salvador would implement a USD 150 million trust to protect citizens from Bitcoin’s volatility. The finance minister of the Central American country explained that it is a currency board. He stated that the goal of buying Bitcoin is not to have it as an international reserve. The Development Bank of El Salvador (Bandesal) would be in charge of managing this fund.

The Salvadoran government is accelerating the adaptation of a legal framework and a technological infrastructure. With this, they seek to massify the use of Bitcoin in the daily life of Salvadoran citizens. El Salvador will begin to apply the Bitcoin Law 90 days after its publication.

The growing relevance of Bitcoin within the world economy is increasingly evident and different governments know it. However, its decentralized and anonymous nature leads them to work on regulations on this type of asset. This has led El Salvador to request the advice of the World Bank and the Central American Bank for Economic Integration.

By Alexander Salazar

At the end of May, stablecoins reached a market capitalization of USD 100 billion. It is not possible to trade stablecoins such as Tether (USDT) within the territory of the United States.

Last month, the market capitalization of stablecoins reached the USD 100 billion milestone. This raised doubts and concerns in the US government due to the “risk that these currencies represent for the global economy.”

Several national political figures in the United States are showing growing concern about the growth of the stablecoin market. The lack of regulation on this type of assets allows the movement of capital that does not reach the traditional banking system. These officials believe that this “potentially prevents regulators from seeing illicit finances,” according to Bloomberg.

Many people use stablecoins to freeze funds from cryptocurrency trading within exchanges. That way, they do not need to put money into their bank accounts.

However, the companies that issue stablecoins are a more concerning factor than crypto assets themselves. The Federal Deposit Insurance Corporation does not protect the money that users trade through a stablecoin. The mission of this agency is to guarantee the recovery of depositors’ money if their bank goes bankrupt.

Massachusetts Senator Elizabeth Warren showed her concern by comparing stablecoins to “wildcat” banknotes. At the end of the 19^th century, a private bank issued the latter, the value of which precious metals and other bonds guarantee. The financial crisis that these banknotes caused in 1875 led to the creation of one of the first banking regulation laws.

For its part, a stablecoin is pegged to the price of the US dollar, the euro, or the pound, among other assets. The price of this type of cryptocurrency does not vary concerning the currency with which it maintains parity. For that reason, it does not suffer from volatility like decentralized cryptocurrencies.

Liquid assets deposited in banks, bonds, and metals, among others, often back stablecoins, as in the case of Tether (USDT). Besides, there are stable cryptocurrencies that receive the backing of other cryptocurrencies, as in the case of DAI. This crypto asset uses a backup scheme in different tokens of Ethereum’s native cryptocurrency Ether (ETH).

Stablecoins Represent a Problem for CBDCs

Most (80%) of central banks have been working on creating their centralized cryptocurrencies or CBDC (Central Bank Digital Currencies).

The director of the Federal Reserve, Jerome Powell, believes that legislators should intervene in the matter of the creation of these currencies. In that way, they would help accelerate the process, which could take years.

In this regard, Powell said that, given the growing use of stablecoins, it is necessary to address “the appropriate regulatory and supervisory framework,” according to Bloomberg.

In the case of the European Central Bank, this institution seeks to obtain veto power over the launch of new cryptocurrencies. If such a scenario were to occur in the United States or Europe, adopting unbanked stablecoins would be increasingly difficult.

Russell Okung believes that his native nation must quickly align itself with the Central American country. The tackler who charges in BTC through Strike offers his support to the Nigerian presidency.

Russell Okung, a player in the US National Football League (NFL), sent a letter to the government of his native country, Nigeria, to follow in the footsteps of El Salvador and meet its financial sovereignty through a national standard under the pioneering banner of cryptocurrencies.

Okung, who is currently part of the offensive line of the NFL’s Carolina Panthers, wrote a lengthy statement in which he clarifies in detail the reasons why he thinks the Nigerian government should walk this path without delay.

The player explained in the published document at Bitcoin Magazine that all nations will face this decision soon, but those that take advantage of the current moment proactively, as in El Salvador, will enjoy important advantages and benefits worldwide for the next generations.

Okung Shows Concern about the Global Economy

In his letter, Okung seems to be concerned about the global economic sector and laments that the fate of the Nigerian economy is in the hands of global central banks and their leaders, who do not represent the interests of the people of this country.

The player explains in the letter that, to take the step that El Salvador took, Nigeria does not need any permission or license, much less obtain a commercial agreement from any corporation. Since bitcoin is a decentralized network, all that Nigeria needs is a vision for a new future and an allocation of its national resources to go after a Bitcoin standard.

The Panthers tackler ended his letter offering his complete support to activate all available resources for Nigeria to go after a Bitcoin standard.  Okung’s letter appeared to be an interesting stance for Twitter CEO Jack Dorsey, who retweeted the document and at the same time placed the Nigerian flag on his profile.

In December of last year, Okung became the first NFL player to receive his payment in bitcoin. Since then, although his team pays him in fiat, the Nigerian receives his current salary in BTC through the intermediation of Strike, a product developed by Zap. This is the company founded by Jack Mallers, the businessman who has been a key piece in El Salvador to become the first nation in the world to use bitcoin as legal tender.

El Salvador is the Biggest Example of Bitcoinization

After the Congress of El Salvador approved the law to turn the main cryptocurrency into legal tender, there has been a sudden interest from various political personalities in various countries around the globe. They express willingness to adjust the laws in their countries with the idea that cryptocurrency is part of their financial system and monetary policy.

In that sense, congressmen from Panama and Paraguay have expressed their intentions of propose bills so that their nations follow in the footsteps of El Salvador by adopting bitcoin as legal tender. In Colombia, there would be a sudden interest in the matter, since Jehudi Castro Sierra, advisor on Digital Transformation to Colombian President Iván Duque Márquez, recently contacted Jack Mallers.

By: Jenson Nuñez

The NGO believes that a foreign currency should not be classified or taxed as an asset. The organization requested a letter and sent it to the prime minister of that country.

The non-profit organization, Lobby New Zealand, sent a letter to the Prime Minister of that country, Jacinda Ardern, to ask her as a representative of the Government to accept bitcoin (BTC) as a foreign currency.

The letter appeared on Monday, June 14, 2021, on the NGO’s Twitter account. In the document, there is also a call on the central administration to make this request come to fruition in at least 86 days, which is the date when the cryptocurrency law will receive a regulation, making this currency a legal tender in El Salvador.

The organization adhered to the letter that New Zealand must fulfill its duties as a sovereign nation. This call to action is expected once international travels come back to normal, assuming it is after September 7, 2021, it is also fair to consider that many New Zealanders and Salvadorans will travel between each country.

This Transition Could bring Tax Charges

For those foreigners arriving in New Zealand, the transition from bitcoin to the New Zealand dollar may incur tax charges under current legislation. Lobby New Zealand believes that this situation is extremely unfair to both New Zealanders and Salvadorans

In the last paragraph of the letter, the NGO tells the government that it is willing to help them legally to make possible every change so that bitcoin receives its treatment as a foreign currency. Lobby New Zealand also argues through a tweet that a foreign currency should not be classified or taxed as an asset under that nation’s law.

A tweeter,  and a Free Market Maximalist expressed through a tweet: “Maybe I don’t understand the tax implications of assets against the currency. But I’m  sure it’s different in most countries.”

What is Lobby New Zealand?

Lobby New Zealand promotes itself as an independent non-profit organization. Their main goal is to achieve a better outcome for all New Zealanders, the entity reports that the issue they bring to the fore is whether actions and policies are in line with the convenient interests of our society.

Among other actions, this NGO has asked the New Zealand government through press releases to deplore the actions of Hamas during the conflict that is happening in Israel. Also, there is a formal request for Trevor Mallard to resign from his position as Speaker of the New Zealand House of Representatives.

Regulation of the Bitcoin Law Must be Ready in at Least 90 Days

This New Zealand Lobby request runs in parallel with the time (90 days) in which the regulation that will accompany the Bitcoin Law will be ready to give legal tender to the most famous cryptocurrency in the Central American nation.

As Joan Godoy, a political science student in Guatemala and co-founder of the Coincaex exchange recently pointed out in the program “Bloque de la Alianza Blockchain”, which is broadcast on the YouTube platform.

By: Jenson Nuñez