The tiny Central American nation of El Salvador may be considering new crypto lending initiatives for the new year.
Last year, we reported on how El Salvador, under president Nayib Armando Bukele Ortez, made history becoming the first country to name Bitcoin as an official legal tender.
Today Joseph Hall at Cointelegraph reports on happenings including a Facebook live audio Wednesday where officials announced a potential plan to create low-interest Bitcoin loans for small to midsized businesses.
“Andrea Martia Gomez, a project manager for Acumen — a decentralized finance (DeFi) lending protocol — shared that ‘some crypto enthusiasts in El Salvador are already using crypto solutions such as DeFi as they offer an ease of use and a higher interest rate than banks,’” Hall writes.
The new initiative is interesting, partly because cryptocurrency is currently being used to generate bigger interest for lenders in times of record low interest rates. That’s a big driver for some small investors who are disappointed by the actions of the U.S. Federal Reserve.
However, in general, cryptocurrency is good for the transmission of money, so it makes sense that a government that is very pro-Bitcoin would consider this as a way to ease economic tensions for small business. And of course, even with low core interest rates, commercial lenders have an incentive to drive rates up for borrowers.
Hall reports El Salvador businesses would be able to use the nations newly designed El Chivo wallets to get these cryptocurrency loans.
Meanwhile, other countries from China to India and Singapore are cracking down on Bitcoin in ways that discourage small investors from taking part.
As we’ve frequently mentioned, people with related positions should always watch for changes in national policy vis-à-vis cryptocurrency, because these can move markets.
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