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Honduras and Guatemala eye digital currencies

Officials from Honduras and Guatemala’s central banks indicated on Wednesday that they are looking into digital currencies in the wake of El Salvador’s legalization of bitcoin. Honduran and Guatemalan central bank presidents both stated that their banks were examining digital currencies with the goal of eventually bringing them into the economy, including through a central bank digital currency.

Image Source: The Economic Times

El Salvador became the first country in the world to recognize bitcoin as legal cash on Tuesday, albeit the launch of its government-backed digital wallet was marred by technical issues and a backlash from distrustful locals. The historic introduction of bitcoin as legal tender in El Salvador on Tuesday was marred by teething issues, including an angry protest by distrustful residents, technological malfunctions, and a drop in the cryptocurrency’s value.

The audacious experiment got off to a rocky start when Salvadoran President Nayib Bukele protested shortly after midnight that the government-backed bitcoin app was unavailable on a variety of internet platforms, including Apple and Huawei. Mr. Bukele used his Twitter account to pressure online retailers to offer the Chivo app, which is a digital wallet. Huawei eventually began making it available.

“The Central Bank of Honduras has also recently begun, as approved by the board of directors, to initiate the study and to determine the feasibility of conducting a pilot test issuing its own digital money or a central bank digital currency,” said Wilfredo Cerrato, president of the Honduran central bank, at a regional economic forum in Tegucigalpa.

The Central American Monetary Council, which brings together central bank authorities, should address the introduction of digital currencies in Central American countries, according to Cerrato. Vice President Jose Alfredo Blanco of Guatemala’s central bank stated the bank was looking into the idea of a native digital currency dubbed iQuetzal.

“The inquiry phase will likely take a long time to complete,” Blanco said, adding that a group had been constituted six months ago. El Salvador made history on Tuesday with its adoption of bitcoin as legal tender, though the launch of its government-backed digital wallet hit technical issues as well as an angry protest by distrustful citizens.

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Also read: El Salvador protests Bitcoin adoption

 

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