The World Bank refused to help El Salvador implement Bitcoin as legal tender, citing environmental and transparency concerns.
The World Bank rejected a request from El Salvador to help the country implement Bitcoin as legal currency. The financial institution carries out the task of providing grants or technical assistance to countries carrying out major financial projects.
In the case of Bitcoin, the World Bank said it was concerned about transparency and the environmental impact of the leading cryptocurrency.
"We are committed to helping El Salvador in various ways with monetary transparency and regulatory processes," a World Bank spokesperson told Reuters yesterday.
Meanwhile, yesterday, Salvadoran Finance Minister Alejandro Zelaya stated that the government has applied to the World Bank for technical assistance on Bitcoin.
There are some doubts about El Salvador's Bitcoin project
The World Bank is not the only major financial institution to be skeptical of El Salvador's decision to adopt Bitcoin as legal currency.
Earlier this month, the International Monetary Fund (IMF) said El Salvador's decision raises "macroeconomic, financial and legal issues that require very careful analysis".
JP Morgan also views El Salvador's decision negatively
“There are clearly significant implications for this country, but it is difficult to see any tangible economic benefits associated with adopting Bitcoin as a second form of legal tender,” JP Morgan analysts said last week.
There is some good news for El Salvador
Benoit Coeure, head of the Bank for International Settlements' Innovation Hub, said that El Salvador's Bitcoin movement was an "interesting experiment".
However, Coeure overshadowed his comment by saying that the BIS does not believe that Bitcoin has passed the test as a means of payment.