World Bank rejects El Salvador request for help in adopting bitcoin

The World Bank rejected a request from El Salvador for assistance in its  bid to adopt bitcoin as a currency, a spokesperson for the Washington-based development lender said Thursday.

El Salvador uses the US dollar as its official currency, but its legislature approved a measure on June 9 that would allow the volatile cryptocurrency to be used in all transactions starting in September, becoming the first nation to do so.

"Although the government did approach us for assistance on bitcoin, this is not something the World Bank can support given transparency and environmental shortcomings," the World Bank official told AFP by email.

"We are committed to helping El Salvador in numerous ways, including currency transparency and regulatory processes."

El Salvador's Finance Minister Alejandro Zelaya said Wednesday that President Nayib Bukele had requested "technical assistance" from the World Bank to implement and regulate the use of virtual currency.

But he stressed that the government is not " replacing the US dollar" with bitcoin.

The IMF also reported concerns about the use of cryptocurrencies.

`` The adoption of bitcoin as a legal tender  raises a number of macroeconomic, financial and legal issues that require very careful analysis, '' IMF spokesman Jerry 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 the recent discussions as "successful," noting that fund officials were not opposed to the use of bitcoin, but wanted to gauge its possible impact.

Bukele promoted the move as a way to revitalize the country's economy and expand access to banking to more of El Salvador's people.

Also Read: Digital marketing firm Gozoop Group acquires Stratton Communications