The World Bank has refused a request from El Salvador to assist in the country’s implementation of Bitcoin as legal tender. The financial institution gives grants or technical assistance to countries pursuing large financial projects.
When it comes to Bitcoin, the World Bank has said it is concerned about transparency and the leading cryptocurrency’s impact on the environment.
“We are committed to helping El Salvador in numerous ways for currency transparency and regulatory processes,” a World Bank spokesperson reportedly told Reuters yesterday, 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.”
Yesterday, the Salvadoran Finance Minister, Alejandro Zelaya, admitted that the government had approached the World Bank for technical assistance on Bitcoin.
Doubt over El Salvador’s Bitcoin project
The World Bank is not the only major financial institution to cast doubt over El Salvador’s decision to adopt Bitcoin as legal tender.
Earlier this month, the International Monetary Fund (IMF) said that El Salvador’s decision raises several “macroeconomic, financial, and legal issues that require very careful analysis.”
JP Morgan also poured cold water on El Salvador’s decision.
“There are clearly important implications for that country, but it is difficult to see any tangible economic benefits associated with adopting Bitcoin as a second form of legal tender,” JP Morgan analysts said last week.
But it’s not all bad news for El Salvador.
Benoit Coeure, head of the Bank for International Settlements’ Innovation Hub, said El Salvador’s Bitcoin move was an “interesting experiment.”
However, Coeure qualified this comment by telling Decrypt the BIS does not believe Bitcoin has passed the test as a means of payment.