Although El Salvador has been able to make history as the first country to accept Bitcoin as legal tender, its road to adoption may be laced with a lot of hurdles.
Recall that the International Monetary Fund (IMF) frowned at the country’s move to make Bitcoin legal tender, noting that the decision “raises a number of macroeconomic, financial and legal issues that require very careful analysis.” Similarly, BTC PEERS reported that remittance firms have been hesitant to support Bitcoin despite the government’s decision.
The latest hurdle El Salvador may have to deal with is the World Bank, which has refused a request for help in the nation’s transition to using Bitcoin as a form of money.
The World Bank, in its defense, has cited several issues surrounding Bitcoin’s environmental impact and transparency as reasons why it will not lend a helping hand to El Salvador. A spokesperson for the bank said:
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, however, noted that the World Bank is helping the country in other ways, particularly in the areas of “currency transparency and regulatory processes."
Earlier on Wednesday, El Salvador’s Finance Minister Alejandro Zelaya tweeted that the country had sought technical assistance from the World Bank.
I want to announce that we have requested technical assistance from @BancoMundial, so that like @BCIE_Org, they can accompany El Salvador in the implementation and regularization of Bitcoin as legal tender.
Although the refusal did not come as a surprise to the crypto community, several proponents of Bitcoin have expressed their displeasure over the World Bank’s decision.
Prominent Bitcoiner Anthony Pompliano responding to the news said that the “World Bank hasn’t figured out how to make money off Bitcoin.” Similarly, the CSO of Blockstream Samson Mow went as far as saying the World Bank is obsolete.
El Salvador’s Bitcoin Law has sparked a lot of excitement amongst Bitcoin proponents. On the flip side, it has attracted a lot of criticism. For instance, economist Steve Hanke said yesterday that the move could “completely collapse the economy.”
Whilst it is too early to predict how the decision will pan out, it appears some other countries such as Tanzania and Paraguay may have taken a cue from El Salvador.