The World Bank will not help El Salvador in its transition to bitcoin.
This was reported by Reuters.
The reasons would be explained in an email exchange between the newspaper and the financial institution. The World Bank was reportedly concerned about the implications of the transition to bitcoin.
“We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes. 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”.
Ever since the small Central American country announced in recent days that bitcoin will become legal tender, there has been debate about the implications of this. The world’s financial institutions, including the International Monetary Fund, are coming to terms with this aspect of the economic policy of the country led by Nayib Bukele.
Bitcoin, El Salvador’s request for assistance from the World Bank
Subsequently, the Minister of Economy Alejandro Zelaya announced that the World Bank had been asked for assistance in implementing the use of bitcoin, which will not entirely replace the US dollar, the currency currently used in El Salvador.
Apparently though, negotiations with the World Bank are not having much success.
In the meantime, El Salvador is continuing on its way and not only will it accept bitcoin, President Bukele has also announced his intention to start mining bitcoin using the energy produced by volcanoes. He also spoke to an expert on the subject, Peter McCormack.
However, as bitcoin prepares to become a foreign currency, President Nayib Bukele had to reiterate that he never said he would oust the US dollar from circulation. This also explains why, at least for the time being, salaries will continue to be paid in dollars and not in bitcoin.
It is certain that the path embarked upon by El Salvador opens up a number of scenarios and it is not impossible that other countries in economic difficulty, victims of inflation and with their currencies now devalued, may follow suit and make similar choices.