The government of El Salvador is partnering up with Solana based lending platform, Acumen to offer loans for the National Commission of El Salvador for Micro and Small Enterprises. The project manager of Acumen, Andrea Gomez has said that the loans will have an annual interest rate of 6% to 7% and can also reach up to 10%.
The new lending program will convert cryptocurrencies to stablecoins, either USDC or to ether and will send the US dollar to Conamype, which will then distribute the loans to the businesses and entrepreneurs in El Salvador.
It comes as the latest move of President Nayib Bukele to mainstream cryptocurrency in the country. He has also announced his plans to build the first-ever “Bitcoin City”, which will use the geothermal power from a volcano for bitcoin mining.
Earlier this week, the rating agency Moody’s has given a warning about the country’s bitcoin holdings saying that it could increase its risk of default. Meanwhile Cathie Wood of Ark Invest has praised El Salvador’s bitcoin push saying that the innovation is making people’s lives better.