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El Salvador Pushes its BTC Plans Alone

The World Bank won’t help El Salvador with its plans for BTC.

Not long ago, El Salvador announced that it will make bitcoin their legal tender. Hence, the Central American nation became the first to permit bitcoin’s full use as a currency. But now it seems like the country’s plans have hit a disadvantage. Because the World Bank says that it will reject El Salvador’s request.

The World Bank won’t aid El Salvador

El Salvador doesn’t really need permission from the World Bank to launch Bitcoin as a payment currency. But things would have been easier for the country’s government if the World Bank cooperates. The institution put the statement that explains why it has been neglecting El Salvador’s wishes:

“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. We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes.”

el salvador

In the past years, El Salvador relied on the U.S. dollar as their official currency. But President Navib Bukele praised the world’s number one digital currency before. He claims that it could potentially help cut down on all the transaction fees. This is for El Salvadorians that work out of the country and send remittance payments home to their families.

Now it is estimated that around 25% of the country’s population is situated in the United States. In 2020m workers sent home around $6 billion. Bukele claims that a lot of money went to transaction fees. He is confident that Bitcoin may help alleviate some of the financial losses that the families are now experiencing.

Additionally, he stated that around three quarters of the nation has underbanked or unbanked people. Thus bitcoin might assist the individuals in gathering the supplies and services needed to survive.

The law that attempts to establish bitcoin as a legal tender states the following:

“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out.”

Everyone is Not Happy

President Bukele is ecstatic about the prospects of bitcoin becoming a legal currency. Many individuals and financial experts have criticized this move. They are saying that the environmental hazards shown by the Bitcoin mining process are too big to notice. Furthermore, some claimed that this could make El Salvador vulnerable to criminal activities like ransomware attacks.

Bitcoin rose beyond $40,000 per unit after the announcement of El Salvador’s plans. But it dropped to around $37,000 during press time.

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