The World Bank has rejected El Salvador’s request for help as the country seeks to become the first nation in the world to implement bitcoin as legal tender.
“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,” a spokesperson for the World Bank said.
“We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes,” the World Bank spokesperson added.
The statement comes after El Salvador’s Finance Minister Alejandro Zelaya said Wednesday that the country had approached the international lender for technical assistance on its adoption of bitcoin.
The country is keeping the US dollar also as its official currency, but President Nayib Bukele has touted the cryptocurrency’s potential to cut down on transaction fees for Salvadorans overseas.The World Bank building in Washington, DC.Per-Anders Pettersson/ Getty Images
About a quarter of El Salvador’s citizens live in the US and last year, they sent home more than $6 billion in remittances.
Bukele, 39, has said a chunk of those transfers are currently lost to intermediaries, and that more than a million poor families could benefit from the use of bitcoin.
He’s added that 70 percent of people in El Salvador don’t have a bank account and operate outside of formal financial infrastructure. Bitcoin could give those people access to the country’s financial systems, he’s said.Demonstrators protest at the World Bank headquarters in 2015.SAUL LOEB/AFP via Getty Images
“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the law establishing bitcoin as official currency reads.
That means prices for goods and services acro...