A bitcoin-backed stablecoin? One more small revolution in El Salvador

Finally bitcoinized dollars – Be the first country to make Bitcoin (BTC) a legal tender currency will not be the only revolution that will be born in salvador. The tiny Central American nation could also see the emergence of first stablecoin dollar major based on the Bitcoin network, not on Ethereum (ETH).

A dollar stablecoin on Bitcoin’s Lightning Network

The crypto startup Galoy offers open source banking platform software that makes it easier to manage bitcoin wallets. Its platform is notably the basis of the Bitcoin Beach Wallet to salvadorbut also serves as a support for BTC wallet applications in Costa Rica and Panama.

Galoy recently announced on its website that it would offer stablesats to its users. This stablecoin will be based on derivative contracts to create a synthetic dollar. It will be backed by bitcoin reserves and will therefore be indexed to the rate of the US dollar.

“Bitcoin has brought digital transactions to previously unbanked communities in Latin America, Africa and beyond. However, its volatility makes it difficult to manage financial constraints. With Stablesats-enabled Lightning wallets, users can send, receive, and hold money in an account by [équivalent] dollar. (…)”

Nicolas Burtey, CEO of Galoy

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$4 million funding for Stablesats

Along with the Stablesats announcement, Galoy also revealed that the company had successfully completed a fundraisingwhich brought him in total $4 million.

This is the investment fund Hivemind Ventures who led this new funding round. Valor Equity Partners, Timechain, El Zonte Capital and Kingsway Capital also participated. This new money will make it possible to further develop thefinancial inclusion what Bitcoin and its lightning network bring:

“The deployment of Stablesats represents the first step in an exciting new momentum for the adoption of the Lightning Network. We see the integration of more exchanges, hedging strategies and currencies, which builds resilience and optionality. Ultimately, we can unlock the ability – for every Lightning Network user – to choose their own Units of Account without ever leaving the network. »

Sébastien Verreault, main GitHub developer of Stablesats

These additional payment facilities, via the second layer network (layer 2) of Bitcoin, will most certainly attract more foreign tourists (and crypto-enthusiasts) in El Salvador, as well as countries where Stablesats-compatible wallets are offered. Remember that, thanks in particular to Bitcoin, El Salvador is one of the very few countries in the world where tourism has recovered (and even exceeded) its 2019 incomebefore the Covid-19 restrictions crisis.

Thanks to Bitcoin and the lightning network, activity is resuming in El Salvador. Prepare your suitcases and fill your wallet! Register now on the PrimeXBT platform to buy the king of cryptocurrencies (commercial link).

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