World Bank has straightforwardly denied El Salvador rendering of any assistance in the matter of Bitcoin’s Legal Tender proposed by the country’s head. World Bank is of the view that there are potential risks involved in legalizing Bitcoin while it is environmentally non-friendly and lacks transparency.
Bitcoin has been officially legitimized in the state of El Salvador for which the credit exclusively goes to President Nayib Bukele.
It was because of the President’s efforts alone that the country’s lawmakers were able to pose their trust in the initiative. Bitcoin is now an officially recognized instrument of trade and means of payment duly authorized under the legal tender.
Yet, granting legal tender to Bitcoin is one thing but the legalization of Bitcoin is a process that involves too many things. The first thing to legalize Bitcoin in El Salvador is the availability of technical assistance. However, there is a definite lack of availability of technical assistance in the country. Obviously, the country has to hire foreign hands in order for getting the job done.
In this regard, El Salvador’s first option for seeking technical assistance was to go to the World Bank and ask for assistance. However, unfortunately, the World Bank has announced on 16th June 2021 that it cannot help El Salvador. The bank refused to lend any technical assistance for the implementation of the legal structure. Had the assistance been provided, then El Salvador would have easily legalized Bitcoin.
A representative of the World Bank stated that the bank is always ready and willing to help El Salvador. If their help was required for ensuring transparency in the currency, the bank would have been glad to do so. Even the bank could have supported El Salvador if it wanted to overhaul the regulatory structure. However, the bank has no choice but to deny the request because crypto is out of topic. The representative apprised further that Bitcoin is not under the bank’s policy because of two major reasons. Firstly, Bitcoin lacks transparency and secondly, its production involves risking the environment. In these circumstances, the bank would not be in a position to provide any sort of assistance to El Salvador, said the representative.
Even the IMF had earlier stated that they were not in favor of El Salvador’s initiative of Bitcoin. For this purpose, IMF proposed a meeting with the delegation of El Salvador. However, the venue of the meeting isn’t decided yet.
Though the doors of the World Bank have been shut down in El Salvador someone else has promised to help the country. Central American Bank for Economic Integration (CABEI) has itself reached out to El Salvador and informed that it would like to do the job. While the option is there, yet El Salvador has to confirm whether it would be pleased to accept the CABEI’s offer or not.