The World Bank has rejected the government of El Salvador request to help the country with bitcoin implementation as a legal tender. They cited the concern over transparency and the environmental impact of bitcoin mining.
El Salvador, this month became the first country to adopt bitcoin as legal tender alongside the US Dollar. According to Salvadoran’s Finance minister, Alejandro Zelaya, country had asked the world bank for technical assistance for implementation of bitcoin. The world bank’s decision will impact the country’s deadline to ensure bitcoin accepted nationwide in the next three months.
“We are committed to helping El Salvador in numerous ways, including for currency transparency and regulatory processes,” said the world bank to Reuters. “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.”
World bank is not the only large institute to doubt El Salvador’s decision to adopt Bitcoin as legal tender. Last week the International Monetary Fund (IMF) said it saw “macroeconomic, financial, and legal issues” with El Salvador’s adoption of bitcoin. Zelaya said the IMF was “not against” the bitcoin implementation.
Investors have recently demanded a higher premium to hold Salvadoran debt—main concerns over the completion of IMF deal, the key to patching budget gaps through 2023.
