World Bank denies El Salvador’s Bitcoin proposal

El Salvador

El Salvador’s plea to the World Bank to help implement Bitcoin as a legal tender has been turned down.

The international lender raised concerns about Bitcoin mining’s environmental impact and the transparency of Bitcoin transactions.

The first nation to formally adopt the digital currency announced its intention to do so earlier this month.

In addition to the US dollar, it aims to use Bitcoin as a parallel legal tender.

The World Bank’s decision could create a delay in meeting the country’s three-month deadline to implement nationwide acceptance of Bitcoin.

A World Bank spokesperson told Reuters in an email that “We are committed to helping El Salvador in numerous ways, including currency transparency and regulatory processes.”

“The World Bank, however, cannot support Bitcoin, given its environmental and transparency issues,” they said.

A World Bank representative said it would offer assistance using the cryptocurrency as a payment method after El Salvador’s finance minister said the country had requested the help.

Zelaya reported that IMF talks had been fruitful, saying that the IMF “is not against” the implementation of Bitcoin.

Nonetheless, the IMF said this week that it is concerned about the “macroeconomic, financial, and legal issues” that Bitcoin faces in El Salvador.

El Salvador became the first country in the world last week to officially recognize Bitcoin as a legitimate form of currency, marking a historic milestone.

The country’s Congress supported the request to adopt bitcoin made by President Nayib Bukele.

El Salvador’s President Bukele declared that the administration had made history and that the decision will make it simpler for Salvadoreans living abroad to transfer money back home.

As a result of the legislation, Bitcoin will be recognized as legal tender alongside the United States dollar within 90 days of the legislation’s approval by Congress.

Every business must accept Bitcoin as legal tender for goods or services under the new rule unless it is unable to supply the technology required to complete the transaction.

In El Salvador, the economy is primarily reliant on remittances, which are money sent home from abroad, which account for approximately 20% of the country’s gross domestic product (GDP)

More than two million Salvadoreans live outside the country, but they maintain strong ties with their country of origin, contributing more than $4 billion (£2.9 billion) back to the country each year.

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