The world bank has revealed that it has refused to assist El Salvador with the implementation of Bitcoin as legal tender.
World Bank Turn Down Request
Salvadoran Finance Minister Alejandro Zelaya stated earlier on Wednesday that the Central American country had sought technical assistance from the Bank in order to use bitcoin as a parallel legal tender to the US dollar.
On Wednesday, El Salvador’s finance minister Alejandro Zelaya said the Central American country had asked for technical assistance from Banco Mundial (the World Bank).
I want to announce that we have requested technical assistance from BancoMundial, so that like BCIE_Org, they can accompany El Salvador in the implementation and regularization of Bitcoin as legal tender.”
Earlier in the month, the country had announced that it plans to approve legislation, making it the only sovereign nation in the world to embrace bitcoin as legal cash. President Nayib Bukele had said that the Government was working on a cooperation with digital wallet company Strike to establish the essential infrastructure for the adoption of bitcoin and its technology.
The World Bank said it could not assist El Salvador’s bitcoin implementation given environmental and transparency drawbacks.
“We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes,” said a World Bank spokesperson.
“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.”
El Salvador’s intentions to integrate and accept Bitcoin in its financial system may be thrown into jeopardy as a result of the World Bank’s decision not to support the country. The administration has set a three-month timeline for ensuring bitcoin acceptance across the country.
The country’s Congress had approved President Bukele’s proposal of adopting Bitcoin and integrating it into the country’s financial system. The president stated that the move was historic and would make it easy for citizens living abroad to send money to their families back in El Salvador.
The legislation proposed that Bitcoin would become legal tender, along with the US Dollar, within 90 days of Congressional approval. The new law mandated businesses to accept Bitcoin as legal tender for their services or goods unless and until the businesses were unable to provide the technological infrastructure needed to process transactions.
The IMF Raised Similar Concerns About El Salvador
El Salvador’s finance minister also held consultations with the International Monetary Fund, stating that the discussions with the IMF had been positive and that it was “not against Bitcoin’s implementation.”
However, El Salvador’s Bitcoin law was considered a hurdle. The IMF released a statement stating that the organization saw financial, legal, and macroeconomic issues with El Salvador’s plan of adopting Bitcoin as legal tender. Per a Reuters report, an IMF spokesman, Gerry Rice said:
“Adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis. We are following developments closely, and we’ll continue our consultations with the authorities.”
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