World Bank won’t support El Salvador’s Bitcoin ambitions

International financial organisations are worried about El Salvador’s moves to instate Bitcoin as legal tender.

| More on:
piles of bitcoins on top of each other

Image source: Getty Images

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.

Bitcoin has recently been plagued with environmental concerns. The same concerns saw Telsa Inc (NASDAQ: TSLA) drop the coin as a payment option last month.

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.

Bitcoin price

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.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Cryptocurrencies