Blockstream proposes a US Dollar Backed Token Issued on the Bitcoin Cash Network for El Salvador with an initial value of $5 Million.
Blockstream Corp, a blockchain technology company headquartered in Canada, recently proposed the issuance of a digital US dollar-denominated bond to El Salvador’s government as part of their efforts to make Bitcoin legal tender.
Primarily, the Blockstream is a company with the world's leading provider of blockchain solutions for financial and legal transactions. The company folks met with government officials in El Salvador to pitch its innovative idea: issuing U.S Dollar bonds that pay out regular coupons via digital tokens on Blockstream Amp (a platform used by Blockstream as well as other companies). We are looking forward to hearing more from this Central American country about their decision!
Blockstream Chief Strategy Officer, Samson Mow mentioned that the tokenized securities have a lot of potential to be more liquid than traditional ones after being traded on cryptocurrency platforms. The platform is open 24/7 and doesn't close for bank holidays or weekends, which can make it easier for investors.
Also key point to remember, that investors don’t need to take their investments out all day long just so they could trade them later in the week when banks are opened again. Mow adds that these tokens also reduce costs imposed by issuers since transactions fees would only come from traders instead of several parties involved with an equity investment such as brokers and dealers.
The comments from Samson Mow clearly indicates,
“It would be groundbreaking if this were a path they were to pursue.”
The company has been working closely with the country since last year and they have recently signed an agreement that will allow them to provide access for all of their citizens without any cost or restrictions on bandwidth, according to CEO David Mow. This would be groundbreaking if it were pursued by other countries also struggling under economic hardships such as Venezuela where high inflation rates are making life difficult for residents there.
To conclude, this proposal aims to provide low-income people with access to digital currency as an investment vehicle and adds more legitimacy for Bitcoin in general. It will not only help them participate in global finance but also enable them to store their wealth safely outside of the fragile local financial system.
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