El Salvador uses the US dollar as its official currency, but
its legislature approved a measure on June 9 that will allow the volatile
cryptocurrency to be used for all transactions starting in September, becoming
the first nation to do so.
"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 World Bank official told
AFP by email.
"We are committed to helping El Salvador in numerous
ways including for currency transparency and regulatory processes."
El Salvador Finance Minister Alejandro Zelaya said Wednesday
that President Nayib Bukele had requested "technical help" from the
World Bank to implement and regulate the use of the virtual currency.
But he stressed that the government is not "replacing
the US dollar" with bitcoin.
The IMF also has flagged concerns about the use of
cryptocurrency.
"Adoption of bitcoin as legal tender raises a number of
macroeconomic, financial and legal issues that require very careful
analysis," IMF spokesman Gerry Rice told reporters last week after El
Salvador's decision, noting the "significant risks" posed by crypto
assets.
The country is in talks with the IMF for additional
financial aid, and Zelaya described recent discussions as
"successful," noting that fund officials were not opposed to the use
of bitcoin but wanted to gauge its possible impact.
Bukele has promoted the move as a way to revitalize the
nation's economy, and extend access to banking to more of El Salvador's people.
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