Digital Assets: World Bank Refuses To Assist El Salvador In Bitcoin Implementation

June 18, 2021 | Digital Assets, News

El Salvador decreed bitcoin as legal tender on June 9.

Last week, El Salvador created history by becoming the first country ever to adopt a cryptocurrency as legal tender. On June 9, the country’s legislators approved a move to give bitcoin the status of being legal currency for use in the nation. El Salvador does not have a currency of its own and has so far used the U.S. dollar as its means of exchange. Bitcoin will not replace the US dollar, instead will function alongside it. However, the World Bank has denied the country’s request for help in the implementation of the move. (BBC)

On Wednesday, El Salvador’s Finance Minister Alejandro Zelaya admitted the country had requested the World Bank for technical assistance in implementing bitcoin as legal tender.

He also confirmed that the country’s discussions with the IMF for a $1 billion loan were progressing successfully and that the IMF was “not against” bitcoin.

World Bank response

“We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes,” a World Bank spokesperson told the Reuters news agency via email. “While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings,” they added.

Despite Zelaya’s statement, the IMF said last week that “adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis.”

“What we have said in the past, in general, is that crypto assets can pose significant risks, and effective regulatory measures are very important when dealing with them,” the IMF spokesman added.

Meanwhile, El Salvador president Nayib Bukele announced last week that he was pushing for a design of a full bitcoin mining hub based on geothermal heat from the country’s volcanoes.

Related Story:    IMF Has Reservations On El Salvador’s Bitcoin Move                                               

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