World Bank rejects El Salvador request for help in adopting bitcoin

World Bank rejects El Salvador request for help in adopting bitcoin

The World Bank said it cannot support El Salvador's adoption of bitcoin as legal tender.
The World Bank said it cannot support El Salvador's adoption of bitcoin as legal tender.

WASHINGTON: The World Bank rejected a request from El Salvador for assistance in its bid to adopt bitcoin as a currency, a spokesperson for the Washington-based development lender said Thursday.

El Salvador uses the US dollar as its official currency, but its legislature approved a measure on June 9 that will allow the volatile cryptocurrency to be used for all transactions starting in September, becoming the first nation to do so.

"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," the World Bank official told AFP by email.

"We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes."

El Salvador Finance Minister Alejandro Zelaya said Wednesday that President Nayib Bukele had requested "technical help" from the World Bank to implement and regulate the use of the virtual currency.

But he stressed that the government is not "replacing the US dollar" with bitcoin.

The IMF also has flagged concerns about the use of cryptocurrency.

"Adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis," IMF spokesman Gerry Rice told reporters last week after El Salvador's decision, noting the "significant risks" posed by crypto assets.

The country is in talks with the IMF for additional financial aid, and Zelaya described recent discussions as "successful," noting that fund officials were not opposed to the use of bitcoin but wanted to gauge its possible impact.

Bukele has promoted the move as a way to revitalize the nation's economy, and extend access to banking to more of El Salvador's people.

Do you like the content of this article?
COMMENT (2)

Giant killers

Thailand shocks powerful Dominican Republic to close out first round of world women's volleyball championship with four wins and just one loss.

21:51

‘Phenomenal’ Arsenal sink 10-man Spurs

LONDON: Mikel Arteta insisted Arsenal proved their credentials as genuine Premier League title contenders with an impressive 3-1 win over 10-man Tottenham in Saturday’s north London derby.

21:40

Business chiefs unite for green future

The CEOs of five of Thailand’s leading businesses have stressed the need for companies of all sizes to contribute more to environmental protection, saying it is now the norm in development and sustainability practice.

20:36