The international lender cited concerns over transparency and the environmental impact of Bitcoin mining. The World Bank's decision could mean the country faces problems in hitting its deadline to ensure that Bitcoin is accepted nationwide in the next three months.
Thew news comes after El Salvador's Finance Minister Alejandro Zelaya said that the country had asked the World Bank for technical assistance with the implementation of the cryptocurrency as an official method of payment.
El Salvador became the first country in the world to adopt Bitcoin as legal tender after Congress approved President Nayib Bukele’s proposal to embrace the cryptocurrency in June 2021. President Bukele said the government had made history, and that the move would make it easier for Salvadoreans living abroad to send money home.
Under the legislation Bitcoin will become legal tender, alongside the US dollar within 90 days of the approval by Congress. El Salvador's economy relies heavily on remittances, or money sent home from abroad, which make up around 20% of the country's gross domestic product (GDP). More than two million Salvadoreans live outside the country but continue to keep close ties with their place of birth, sending back more than USD 4 billion each year.
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