The World Bank has reportedly refused to help El Salvador instate Bitcoin (CRYPTO: BTC) as a legal tender.
The South American country committed to instate the cryptocurrency as legal tender last week.
World Bank’s refusal
According to reporting by Reuters, the World Bank has declined El Salvador’s requests for assistance on implementing the cryptocurrency as legal tender due to environmental concerns and transparency issues.
The cryptocurrency relies on the process of Bitcoin mining to verify transactions. As Bitcoin mining is extremely complicated, miners use supercomputers to do much of the hard work.
These super computers use a huge amount of energy and often rely on electricity from burning coal.
Additionally, Bitcoin can be used anonymously, although not as anonymously as cash. Still, this can hinder financial transparency.
The World Bank isn’t the only international financial organisation concerned with the country’s newest currency.
IMF communication department director Gerry Rice told a press conference last week that the IMF has concerns about El Salvador’s adoption of the cryptocurrency as legal tender. He said:
[The] adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis. So we are following developments closely and will continue our consultations with the authorities.
El Salvador’s Legislative Assembly voted in favour of recognising the cryptocurrency as legal tender on 10 June.
The nation’s president, Nayib Bukele, said the cryptocurrency’s adoption will give Salvadorians more financial freedoms and allow them to dodge fees when receiving remittances from family members living abroad.
Currently, a single Bitcoin is worth $50,790.43. The cryptocurrency’s price has fallen 3.8% over the last 24 hours.
It has gained 5.6% since El Salvador recognised the cryptocurrency as legal tender.