World Bank rejects El Salvador’s request to help implement Bitcoin

The World Bank has rejected a request from El Salvador to help with the implementation of Bitcoin as legal tender.

The international lender cited concerns over transparency and the environmental impact of Bitcoin mining.

Earlier this month, the Central American country announced plans to become the first nation to formally adopt digital currency.

The World Bank’s decision could mean the country faces problems in hitting its deadline to ensure that Bitcoin is accepted nationwide in the next three months.

El Salvador has become the first county to adopt Bitcoin as a legal tender

Earlier El Salvador’s President Nayib Bukele sent a law to the country’s congress proposing to make Bitcoin legal tender – that was then passed.

If approval makes El Salvador the first nation in the world to give cryptocurrency this status.

Under the legislation, prices can be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.

Salvadorian President Nayib Bukele announced in a video recording shown during the Bitcoin 2021 conference held in Miami that he has a strong belief in cryptocurrency.

“It will bring financial inclusion, investment, tourism, innovation and economic development for our country,”

BUKELE SAID IN A TWEET SHORTLY BEFORE THE VOTE IN CONGRESS, WHICH IS CONTROLLED BY HIS PARTY AND ALLIES.

Bukele added that the use of Bitcoin would not bring risks to users.

“The government will guarantee the convertibility to the exact value in dollars at the moment of each transaction,”

El Salvador’s dollarized economy relies heavily on money sent back from workers abroad. World Bank data showed remittances to the country made up nearly $6 billion or around a fifth of GDP in 2019, one of the highest ratios in the world.