Posted: Friday, June 18, 2021. 10:05 am CST.
By Aaron Humes: Citing concerns over transparency and the environmental impact of Bitcoin mining, the World Bank has refused a request from El Salvador for help with the implementation of the cryptocurrency as legal tender, the BBC reports.
It means potential problems for the Central American nation in in hitting its deadline to ensure that Bitcoin is accepted nationwide in the next three months.
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, adding, “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 announced its plans earlier this month to use Bitcoin as a parallel legal tender alongside the US dollar.
Finance Minister Alejandro Zelaya said on Wednesday that discussions with the International Monetary Fund (IMF) have been successful, saying the IMF was “not against” the implementation of Bitcoin. But agency said last week that it saw “macroeconomic, financial and legal issues” with El Salvador’s adoption of Bitcoin.
President Nayib Bukele said the government had made history, and that the move would make it easier for Salvadoreans living abroad to send money home.
Under the legislation Bitcoin will become legal tender, alongside the US dollar within 90 days of the approval by Congress. The new law means every business must accept Bitcoin as legal tender for goods or services, unless it is unable to provide the technology needed to process the transaction.
El Salvador’s economy relies heavily on remittances, or money sent home from abroad, which make up around 20 percent of the country’s gross domestic product (GDP).
More than two million Salvadoreans live outside the country, but continue to keep close ties with their place of birth, sending back more than $4 billion each year.
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