The president of the Central American Bank for Economic Integration told a press conference today that the region's most prominent multilateral bank will assist El Salvador in establishing Bitcoin as legal tender in the country.
Dante Mossi told reporters that the development bank will establish a "technical team" to assist the government of El Salvador. In a message to El Salvador President Nayib Bukele and his government, Mossi said: "We feel very proud that your government's first choice in soliciting help and support with the implementation is the Central American Bank for Economic Integration."
"There is no other country that has adopted Bitcoin as widely as El Salvador has" said Mossi. "This is a challenge that must be taken head on in order to find the best way to protect the user."
Mossi further explained that the bank’s technical team would be made up of its own experts, as well as those from El Salvador's Ministry of Finance and the country's central bank. The development bank plans to assist with project planning and assistance navigating the legal aspects of implementing Bitcoin as El Salvador’s currency.
#DeDinero «La señal que les quiero dejar el día de hoy, es que el @BCIE_Org está acompañando a El Salvador en esta nueva e innovadora política de la adoptación de la criptomoneda denominada #Bitcoin para uso legal»: presidente del @BCIE_Org, @DanteMossi. pic.twitter.com/sMeevVvafr
— Diario El Salvador (@elsalvador) June 14, 2021
At the moment, El Salvador’s principal advisory partner is the development team behind the Strike wallet, which is a Lightning Network wallet that acts as a middleman between the Bitcoin network and the banking system, allowing users to transfer Bitcoin directly to and from their bank accounts. El Salvador plans to create both a state-sponsored digital wallet and a fund to ensure that its residents can smoothly switch between Bitcoin and dollars (or, at least, its blockchain equivalent in Tether's USDT stablecoin).
"In terms of the technical assistance provided by the bank, we will be selecting experts in the field who will advise on how to implement such innovative reform, including risk assessment and regulation." Mossi said.
Bitcoin's status as legal tender poses a number of important challenges for the Salvadoran government and for its international relations. In a previous conversation on Twitter Spaces, President Bukele explained that he was in talks with the International Monetary Fund, and said he would have a lot of explaining to do about the workings of the economy now that a non-fiat currency is legal tender in his country.
Similarly, the legal status of Bitcoin in other countries also adds a certain degree of complexity to the financial relations between El Salvador and other countries. Bitcoin, after all, is considered a commodity, digital currency, or even a prohibited asset for trading depending on the country.
Editor's note: This article was updated after publication to provide additional details.