The World Bank refuses to help El Salvador's Bitcoin implementation

midian182

Posts: 6,894   +62
Staff member
In context: El Salvador's move to have the entire country accept Bitcoin after it became legal currency could face problems following the World Bank's decision not to help with the implementation. The international financial institution cited concerns over the environmental impact of Bitcoin mining and transparency.

Earlier this month, El Salvador became the first country to adopt Bitcoin as legal tender. It sits alongside the US dollar as the Central American country's official currency, with the exchange rate freely established by the market. Additionally, prices for goods can be shown in Bitcoin, tax contributions can be paid with the crypto, and exchanges involving Bitcoin will not be subject to capital gains tax.

El Salvador set a three-month deadline for Bitcoin to be accepted across the nation, but hitting that target may prove difficult after the World Bank said it must do so without the organization's assistance.

"We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes," said a World Bank spokesperson in an email to Reuters.

"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."

On Wednesday, El Salvador's Finance Minister Alejandro Zelaya said the country had sought technical assistance from the World Bank as it aimed to implement Bitcoin as an official currency.

Separately, Zelaya said that the International Monetary Fund was "not against" the crypto's implantation and ongoing negations had been successful, though the IMF did say there are "macroeconomic, financial and legal issues" with the process.

Bitcoin has fallen from around $39,000 yesterday to ~$37,600 at the time of writing. We recently heard that the Chinese crackdown on cryptomining and the decreasing value of BTC have seen demand for graphics cards in the Asian nation cool amid declining GPU prices.

Image credit: Useacoin

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umbala

Posts: 368   +485
Is crypto really any less legitimate than all the fiat currencies being traded? And I include the USD. If crypto starts being accepted as legal tender then at least it can finally be taxed.
Why do people keep asking this same dumb question? The answer is YES crypto is less legitimate than any real currency out there. Real currency is backed by SOMETHING, such as a government and a country's economy. Crypto is backed by NOTHING except the speculation that an even bigger idi0t will come along and pay an even higher price than YOU the current idi0t. It's like if I somehow convinced everyone that my pubes are worth $1 each and there's a limited amount, so the price must go up if others want my pubes too!
 

Ludak021

Posts: 471   +348
Why do people keep asking this same dumb question? The answer is YES crypto is less legitimate than any real currency out there. Real currency is backed by SOMETHING, such as a government and a country's economy. Crypto is backed by NOTHING except the speculation that an even bigger idi0t will come along and pay an even higher price than YOU the current idi0t. It's like if I somehow convinced everyone that my pubes are worth $1 each and there's a limited amount, so the price must go up if others want my pubes too!

Not US Dollar, it's backed by nothing at all.
 

duckofdeath

Posts: 420   +556
Is crypto really any less legitimate than all the fiat currencies being traded? And I include the USD. If crypto starts being accepted as legal tender then at least it can finally be taxed.
You don't know the value of the payment you're getting. You don't know where the money is coming from. You have no way to dispute payments you've made.
That's just a few huge ethics issues with crypto currency, other than the ones mentioned by the world bank.
Regarding the Ponzi scheme label. It's got all the traits of one. Designed to trigger people to buy big with the dream of making quick money without any guarantees.
 

wiyosaya

Posts: 6,080   +4,313
IMO, I'd bet that El Salvador was hoping to make a huge profit on this. As I see it, whoever made the decision to use it as legal tender there is taking a big chance. If the country goes bankrupt, we will know what happened.
 

Jeff Re

Posts: 236   +207
I want to see a study showing the environmental impact of crypto mining vs printing money vs credit cards.
 

terzaerian

Posts: 960   +1,398
Nonsense, it's backed by the full faith and credit of the USA.
Look at our leadership for the past 20 years and tell me that's worth ****. The United States government is rotten from the inside out, dominated by predator crony capitalists in service to foreign interests, sitting atop a ticking nuclear bomb of debt.

You and the rest of the epic gamers tongue-servicing the Fed can get vaporized by it if you want. Just stop getting in the way of people that don't want to.
 

BadThad

Posts: 570   +599
Look at our leadership for the past 20 years and tell me that's worth ****. The United States government is rotten from the inside out, dominated by predator crony capitalists in service to foreign interests, sitting atop a ticking nuclear bomb of debt.

You and the rest of the epic gamers tongue-servicing the Fed can get vaporized by it if you want. Just stop getting in the way of people that don't want to.
The Fed is the most opaque institution in the world. Sadly, I agree. However, what is the alternative to the Fed? The cat was let out of the bag already, NO country can back their currency with physical assets anymore. Every country prints money from nothing and inflation is a law of economics in 2021.
 

terzaerian

Posts: 960   +1,398
The Fed is the most opaque institution in the world. Sadly, I agree. However, what is the alternative to the Fed? The cat was let out of the bag already, NO country can back their currency with physical assets anymore. Every country prints money from nothing and inflation is a law of economics in 2021.
It doesn't have to be that way, and as reality gets closer and closer to catching up to the Fed, it won't be.

You've been tricked into attacking your own lifeboat, my dude, by a boat captain and crew that wants to take everyone on the ship with them to the bottom.
 

BadThad

Posts: 570   +599
It doesn't have to be that way, and as reality gets closer and closer to catching up to the Fed, it won't be.

You've been tricked into attacking your own lifeboat, my dude, by a boat captain and crew that wants to take everyone on the ship with them to the bottom.
You failed to answer my question. What do you believe is the alternative to the Fed? I've not been tricked, I've been complaining about the Fed for 4 decades. My contention is that there is no alternative at this point short of our government buying 20 trillion dollars worth of gold to back the currency. It's not going to ever happen. Should the Fed "sink to the bottom" we would ALL be screwed.
 

terzaerian

Posts: 960   +1,398
You failed to answer my question. What do you believe is the alternative to the Fed? I've not been tricked, I've been complaining about the Fed for 4 decades. My contention is that there is no alternative at this point short of our government buying 20 trillion dollars worth of gold to back the currency. It's not going to ever happen. Should the Fed "sink to the bottom" we would ALL be screwed.
It's a new technology, I can't say. I'm sure the Wright Brothers couldn't have given you a full picture of the current global aviation infrastructure when challenged on how it will replace the steam train, either, and if they had, the people at the time likely would have dismissed it as a fantasy. The system that will replace the Fed is only now in its formative stages.

The question is, do you want China or El Salvador to be the leaders of that system? Because with the US's current leadership, they will be. In which case, we'll all be screwed far, far worse than if the USD just collapses.

Bitcoin, as it was originally envisioned, aligns with our principles as Americans; if we want the system that replaces the Fed to continue to reflect those principles, we need to engage with it, not throttle it or block it in a vain attempt to preserve, in mouldering state, the Fed.
 

BadThad

Posts: 570   +599
It's a new technology, I can't say. I'm sure the Wright Brothers couldn't have given you a full picture of the current global aviation infrastructure when challenged on how it will replace the steam train, either, and if they had, the people at the time likely would have dismissed it as a fantasy. The system that will replace the Fed is only now in its formative stages.

The question is, do you want China or El Salvador to be the leaders of that system? Because with the US's current leadership, they will be. In which case, we'll all be screwed far, far worse than if the USD just collapses.

Bitcoin, as it was originally envisioned, aligns with our principles as Americans; if we want the system that replaces the Fed to continue to reflect those principles, we need to engage with it, not throttle it or block it in a vain attempt to preserve, in mouldering state, the Fed.

Well, this is problem a million fold greater than the Wright brothers faced in predicting the future. They cannot be compared. I am not aware of any "formative changes" in process. Our elected officials are more than happy to keep fiat currency going at infinitum. There's nobody in government, nor will there ever likely be, that is able to solve the problem as government is much better at creating problems than solving them.

As old as I am, at this point I'm caring less and less. I'll be dead and long gone and the Fed will still control America. In the mean time, we and the rest of the world are stuck with eternal fiat currency.
 

bviktor

Posts: 419   +734
I read a great article on why this stupid concept is almost guaranteed to cause a financial collapse in El Salvador, but I just can't find it.

It's also very amusing that El Salvador wants to give the middle finger to banks, yet asks them for help lol.
 

Dimitrios

Posts: 821   +627
The Fed is the most opaque institution in the world. Sadly, I agree. However, what is the alternative to the Fed? The cat was let out of the bag already, NO country can back their currency with physical assets anymore. Every country prints money from nothing and inflation is a law of economics in 2021.

Very well said!
 

fl21289

Posts: 265   +327
The only thing USD is backed by is paper and ink. As we continue to print more and more money than what we have. Whoever says your dollar is backed by something is living in the past. It's not... The only thing its backed by is an insurance company your bank has which cost USD and pays back USD... But if the USD is worthless then we are back to square one. Point is. Your dollar is not backed up just like cryptocurrency.

And I agree. The US has been a joke now for decades, which should at least tackle the crypto and become the leaders for it. At least, Texas and Florida is starting to.
 

mattferg

Posts: 168   +168
You don't know the value of the payment you're getting. You don't know where the money is coming from. You have no way to dispute payments you've made.
That's just a few huge ethics issues with crypto currency, other than the ones mentioned by the world bank.
Regarding the Ponzi scheme label. It's got all the traits of one. Designed to trigger people to buy big with the dream of making quick money without any guarantees.

“You don’t know where the money is coming from”

Crypto is non-fungible. By this single line you proved you have no idea what you’re talking about. You can see exactly where the coin you have has been since it’s creation.