After making Bitcoin a form of legal tender, El Salvador is now having technical difficulties introducing the cryptocurrency to the population.
El Salvador’s Finance Minister, Alejandro Zelaya, announced on Wednesday that the government had requested technical support from the World Bank to establish bitcoin as an official payment option. However, due to concerns about Bitcoin mining’s transparency and environmental effect, the World Bank rejected El Salvador’s request for help.
A World Bank spokesperson said, “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.” The international lender’s decision might mean El Salvador will miss its three-month goal to have Bitcoin accepted across the country.
Earlier this month, El Salvador announced ambitions to become the first country to legally embrace the digital currency. Its goal is to utilize Bitcoin as a form of legal tender alongside the US dollar.
The country’s Bitcoin Law states, “The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction.” As a result, its citizens will be able to use Bitcoin to pay for everything, including taxes and legal debt, as well as ordinary transactions like groceries.
Concerns regarding the usage of cryptocurrencies have also been raised by the International Monetary Fund (IMF). After El Salvador’s announcement, IMF spokesperson Gerry Rice said, “Adoption of bitcoin as legal money creates a variety of macroeconomic, financial, and legal concerns that require very careful examination.”
Will El Salvador meet its three-month goal of adopting Bitcoin as legal tender, or will technical difficulties get in the way?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.