The World Bank has rejected El Salvador’s request for technical assistance on implementing Bitcoin as a legal tender. Now the Central American country will have to look at other financial bodies such as the International Monetary Fund (IMF) for support.
World Bank Says No to El Salvador
El Salvador made history last week when it became the first country to officially adopt Bitcoin as a legal tender. However, there is still work to do before the citizens start using the cryptocurrency to conduct daily transactions. There are technical aspects that need to be sought out before people can use BTC comfortably alongside the US Dollar in El Salvador.
The Central American turned to the World Bank to help with the technical aspects, but its request was denied. A World Bank spokesperson told Reuters that although it wishes to help El Salvador in numerous ways, including for currency transparency and regulatory processes, adopting Bitcoin is not one of them.
“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 spokesperson added. The situation is tough for financial bodies because El Salvador is using the US Dollar as its official legal tender, and adding Bitcoin could make things complicated.
IMF might be the solution
The World Bank has rejected El Salvador’s request, but the Finance Minister Alejandro Zelaya has revealed that they are now in talks with the IMF. The minister said talks are progressing positively, and the IMF doesn’t have an issue with El Salvador adopting Bitcoin as a legal tender.
Last week, the IMF said it envisions macroeconomic, financial and legal issues with El Salvador’s adoption of Bitcoin. If the IMF doesn’t help, El Salvador could turn to the Central American Bank for Economic Integration (CABEI). The financial agency has already offered to provide technical assistance to El Salvador regarding its implementation of Bitcoin as a legal tender.
Bitcoin’s price has slipped below $40k again after rising above that resistance level earlier this week. The leading cryptocurrency is still unable to mount a rally that could propel it towards its all-time high price of $65k again.