The World Bank has rejected El Salvador’s request for help on the implementation of Bitcoin as a legal tender. After it comes, Bitcoin hovered below $40,000 on Thursday morning.
In Wednesday’s announcement, the World Bank stated it could not assist El Salvador’s Bitcoin implementation because of environmental and transparency drawbacks.
“We are committed to helping El Salvador in numerous ways, including for currency transparency and regulatory processes,” said a bank spokesman to Reuters.
“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,” he stated.
Recently this month, El Salvador became the world’s first country that has accepted Bitcoin as legal tender, while President Nayib Bukele promoting the potential of cryptocurrency for Salvadorans wealth.
Despite all his worthy rhetoric of financial inclusion for Salvadorans and benefits of remittances, which reaches 20% of GDP of the lean country, the attracting of Bitcoiners as a source of investment raises certain concerns.
The Latin American country plans to use Bitcoin alongside the US dollar. However, after the World Bank’s decision, it could face problems reaching its deadline of Bitcoin’s implementation in the next three months.
According to Yahoo Finance, Bitcoin declined below $40,000 after the World Bank decided on El Salvador’s request. At the time, major crypto investor Anthony Pompliano commented on Twitter that the World Bank just “hasn’t figured out how to make money off Bitcoin.”
As El Salvador’s finance minister Alejandro Zelaya said on Wednesday, this discussion with the International Monetary Fund (IMF) has been successful so far. In his words, the IMF was “not against” the implementation of the cryptocurrency.
Bloomberg experts say it is still too early to judge where El Salvador’s crypto experiment will go. But the IMF highlighted that the risk of worsening governance and regulatory oversight in the country is real. This wary position on El Salvador’s plans is raising doubts that the IMF will accept Bukele’s recent request for a $1.3 billion loan.