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World Bank declines to help El Salvador adopt bitcoin, citing environmental and transparency concern
Also:
• World Bank rejects El Salvador request for Bitcoin help (BBC)
• World Bank slams bitcoin, declines to help El Salvador’s cryptocurrency plan (Ars Technica)
______________________________________________________________________
Source: Washington Post
World Bank declines to help El Salvador adopt bitcoin, citing environmental and transparency concerns
By Antonia Noori Farzan
June 17, 2021 at 2:03 p.m. EDT
El Salvador’s plan to adopt bitcoin as legal tender hit a roadblock this week when the World Bank said that it would not help with the rollout of the cryptocurrency.
“We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes,” a World Bank spokesperson wrote in an email to The Washington Post. “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 rejection is the latest sign that President Nayib Bukele’s ambitions to bring El Salvador into a new age of prosperity through the use of volcano-powered bitcoin may be less realistic than he would like to admit. El Salvador’s new law, which will require merchants to accept bitcoin as a form of payment beginning in three months, was passed with little debate just days after Bukele proposed the idea at a Miami bitcoin conference. Now as the government begins to figure out exactly what the experiment will entail, global financial institutions are expressing hesitation.
El Salvador’s finance minister, Alejandro Zelaya, had told reporters Wednesday that the government hoped to receive technical assistance from the World Bank, as well as advice on coming up with standards for the use of the cryptocurrency. The organization distributes billions of dollars to developing nations through loans and grants each year, and its involvement in El Salvador’s bitcoin plan would have been seen as a sign that the experiment was backed by powerful players in the international development world.
-snip-
By Antonia Noori Farzan
June 17, 2021 at 2:03 p.m. EDT
El Salvador’s plan to adopt bitcoin as legal tender hit a roadblock this week when the World Bank said that it would not help with the rollout of the cryptocurrency.
“We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes,” a World Bank spokesperson wrote in an email to The Washington Post. “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 rejection is the latest sign that President Nayib Bukele’s ambitions to bring El Salvador into a new age of prosperity through the use of volcano-powered bitcoin may be less realistic than he would like to admit. El Salvador’s new law, which will require merchants to accept bitcoin as a form of payment beginning in three months, was passed with little debate just days after Bukele proposed the idea at a Miami bitcoin conference. Now as the government begins to figure out exactly what the experiment will entail, global financial institutions are expressing hesitation.
El Salvador’s finance minister, Alejandro Zelaya, had told reporters Wednesday that the government hoped to receive technical assistance from the World Bank, as well as advice on coming up with standards for the use of the cryptocurrency. The organization distributes billions of dollars to developing nations through loans and grants each year, and its involvement in El Salvador’s bitcoin plan would have been seen as a sign that the experiment was backed by powerful players in the international development world.
-snip-
Read more: https://www.washingtonpost.com/world/2021/06/17/world-bank-bitcoin-el-salvador/
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Source: BBC
World Bank rejects El Salvador request for Bitcoin help
17 June 2021
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 the digital currency.
It aims to use Bitcoin as a parallel legal tender alongside the US dollar.
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.
-snip-
17 June 2021
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 the digital currency.
It aims to use Bitcoin as a parallel legal tender alongside the US dollar.
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.
-snip-
Read more: https://www.bbc.com/news/business-57507386
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Source: Ars Technica
BITCOIN BATTLE—
World Bank slams bitcoin, declines to help El Salvador’s cryptocurrency plan
Bank faults bitcoin's “environmental and transparency shortcomings.”
TIM DE CHANT - 6/17/2021, 11:39 AM
Last week, El Salvador’s government passed a law to accept bitcoin as legal tender alongside the US dollar. The country receives $6 billion in remittances per year—nearly a quarter of its gross domestic product—and the hope is that bitcoin’s lower transaction costs could boost that amount by a few percentage points.
The move was first proposed by the country’s president, Nayib Bukele, who said he hoped that in addition to facilitating lower remittance fees, the bitcoin plan would attract investment and provide an avenue for savings for residents, about 70 percent of whom are unbanked. (What Bukele didn’t say, but what Bloomberg has reported, is that he and members of his political party have owned bitcoin for years.)
Adding the cryptocurrency to the roster isn’t a simple task, though, and the new law gives the country just three months to roll the plan out nationwide. No country has ever used bitcoin or any other cryptocurrency as legal tender, and challenges abound. To address those concerns, El Salvador turned to the World Bank and the International Monetary Fund for assistance; the latter is currently considering a $1.3 billion financing request from the country.
The IMF offered a guarded assessment of El Salvador’s bitcoin move, with spokesperson Gerry Rice saying at a press briefing, “Adoption of bitcoin as legal tender raises a number of macroeconomic, financial, and legal issues that require very careful analysis.”
The World Bank was less generous. “We are committed to helping El Salvador in numerous ways, including for currency transparency and regulatory processes,” a World Bank spokesperson told 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.”
In other words, bitcoin’s energy demands and its ease of use in money laundering, tax evasion, and other illegal schemes makes the cryptocurrency a no-go in the eyes of the World Bank.
-snip-
World Bank slams bitcoin, declines to help El Salvador’s cryptocurrency plan
Bank faults bitcoin's “environmental and transparency shortcomings.”
TIM DE CHANT - 6/17/2021, 11:39 AM
Last week, El Salvador’s government passed a law to accept bitcoin as legal tender alongside the US dollar. The country receives $6 billion in remittances per year—nearly a quarter of its gross domestic product—and the hope is that bitcoin’s lower transaction costs could boost that amount by a few percentage points.
The move was first proposed by the country’s president, Nayib Bukele, who said he hoped that in addition to facilitating lower remittance fees, the bitcoin plan would attract investment and provide an avenue for savings for residents, about 70 percent of whom are unbanked. (What Bukele didn’t say, but what Bloomberg has reported, is that he and members of his political party have owned bitcoin for years.)
Adding the cryptocurrency to the roster isn’t a simple task, though, and the new law gives the country just three months to roll the plan out nationwide. No country has ever used bitcoin or any other cryptocurrency as legal tender, and challenges abound. To address those concerns, El Salvador turned to the World Bank and the International Monetary Fund for assistance; the latter is currently considering a $1.3 billion financing request from the country.
The IMF offered a guarded assessment of El Salvador’s bitcoin move, with spokesperson Gerry Rice saying at a press briefing, “Adoption of bitcoin as legal tender raises a number of macroeconomic, financial, and legal issues that require very careful analysis.”
The World Bank was less generous. “We are committed to helping El Salvador in numerous ways, including for currency transparency and regulatory processes,” a World Bank spokesperson told 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.”
In other words, bitcoin’s energy demands and its ease of use in money laundering, tax evasion, and other illegal schemes makes the cryptocurrency a no-go in the eyes of the World Bank.
-snip-
Read more: https://arstechnica.com/tech-policy/2021/06/world-bank-slams-bitcoin-declines-to-help-el-salvadors-cryptocurrency-plan/
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