World Bank Shuns El Salvador Bitcoin Adoption Plan

Forum 2 years ago

World Bank Shuns El Salvador Bitcoin Adoption Plan

The World Bank has stated that it cannot assist El Salvador’s Bitcoin implementation due to environmental concerns and transparency drawbacks.

On Wednesday, a World Bank spokesperson stated that they are committed to helping El Salvador in numerous ways, including currency transparency and regulatory processes for its Bitcoin adoption plan.

However, the international financial institution was not keen on the Bitcoin part, according to Reuters, 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.”

Banks Not Big On Bitcoin

Salvadoran Finance Minister Alejandro Zelaya said the Central American country had sought technical assistance from the World Bank. A bill was passed on June 9 legalizing Bitcoin as the country seeks to use it as a parallel tender alongside the U.S. dollar.

The minister also stated that ongoing negotiations with the International Monetary Fund had been successful. However, the IMF was also concerned over Bitcoin, citing “macroeconomic, financial and legal issues.”

Siobhan Morden, head of Latin America fixed-income strategy at Amherst Pierpont Securities in New York, told Reuters:

“There is no fast track for a solution on an IMF program and even uncertainty on whether the bitcoin proposal is compatible with diplomatic U.S. (or) multilateral relations,”

President Nayib Bukele is unperturbed and plans to steam ahead (literally) with his Bitcoin adoption drive. On June 10, he announced plans to harness the country’s abundance of renewable geothermal energyto build Bitcoin mining facilities.

On June 14, the government entered into a discussion with local companies about the possibility of paying salaries in Bitcoin. In a tweet earlier today, Bukele hinted that a lot more BTC ATMs would be required in El Salvador going forwards.

1,000? How about 1,500?#BTC♻️??? https://t.co/PDApT7M7T5

— Nayib Bukele ?? (@nayibbukele) June 16, 2021

On Monday, it was reported that the Central American Bank for Economic Integration (CABEI) agreed to work with the El Salvadoran government to implement Bitcoin as the country’s second legal tender.

Not all have been so supportive, however. On Wednesday, renowned economist Steve Hanke derided the plan, labeling it as a “very stupid” decisioninfluenced by “dark forces” working against the U.S. dollar.

BTC Price Update

Bitcoin’s price reacted very positively to the news last week, but it has retreated again today. According to CoinGecko, BTC has declined 2.2% on the day to change hands for $39,100 at the time of press.

Bitcoin topped $40K for the first time in three weeks on Tuesday but had retreated below it again by late trading on Wednesday.

There is clear resistance at this price zone, while on the downside, support lies at around $36K.