El Salvador is focusing on blockchain and not only on Bitcoin, according to the announcement of an agreement between the government and Koibanx to develop a blockchain infrastructure based on Algorand’s technology.
El Salvador will create a blockchain infrastructure on Algorand
The government of El Salvador has chosen to turn to Koibanx, a company established throughout Latin America for its business focused on integrating cryptocurrencies into banking and financial services in general.
Koibanx, in turn, has chosen to work with Algorand, with whom it already has several ongoing partnerships. One of them is a national blockchain-based Covid-19 certification programme.
Leo Elduayen, CEO and founder of Koibanx, explained:
“El Salvador is paving the way for other countries to realize the promise of blockchain. We are honored to work with the government to enable Salvadorans to access a global digital economy and the potential for a more prosperous future”.
Technology aimed at giving El Salvador a boost
It is clear from this news that El Salvador is betting heavily on blockchain technology and not just Bitcoin to boost its economy.
The Central American country will in fact adopt Bitcoin as legal tender, alongside the US dollar, from 7 September. President Nayib Bukele hopes that cryptocurrencies will save money on remittance fees and translate into more economic revenue for the country.
El Salvador’s economy relies heavily on remittances, or money sent from abroad, but these are subject to costs and waiting times. Bitcoin would allow a breakthrough in this regard.
However, it seems that the technology behind Bitcoin will also be used for other financial purposes.
The choice of Algorand
Algorand lends itself to a variety of use cases, as it is highly scalable, allowing it to handle a multitude of high-volume transactions.
Indeed, Elduayen explains:
“To make this possible, we needed technology that was robust enough to handle the needs of an entire nation. We found that out in Algorand, a proven blockchain that meets our rigorous requirements for speed, security and stability”.
Algorand is currently being used by financial institutions, DeFi projects and soon by the government of El Salvador, with a total of 700 organizations relying on it.
These include the Italian SIAE, the association that protects copyrights, and PlanetWatch, a French startup that monitors air quality.
Algorand is now facing a new task: working with the government of El Salvador and serving an entire nation.