World Bank rebuffs El Salvador with Bitcoin currency integration

The World Bank has declined to help El Salvador with the integration of Bitcoin into its currency system highlighting concerns around the environment and transparency.

According to Reuters, a World Bank spokesperson said in an email that the bank was committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes. However, given the ‘environmental and transparency shortcomings’ of Bitcoin, it was not willing to provide assistance on currency integration.

El Salvador’s government recently passed a bill that saw Bitcoin join the US dollar as legal tender in the Central American country. Following the legalisation, President of El Salvador Nayib Bukele said cryptocurrencies have the potential as a remittance currency for Salvadorans around the world. He added that around 70% of the El Salvadoran population do not have bank accounts, with Bitcoin helping to facilitate the banking of unbanked.

Salvadoran Finance Minister Alejandro Zelaya stated ongoing negotiations with the International Monetary Fund (IMF) had been ‘successful’ despite the IMF claiming last week it saw ‘macroeconomic, financial and legal issues’ with El Salvador’s adoption of Bitcoin.

Following the IMF update, FinTech Futures highlighted investors have already started demanding higher premiums on Salvadoran debt due to concerns of the completion of the IMF deal – a deal which FF described as key to ‘patching budget gaps’ through 2023.

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