The price of Bitcoin (CCC:BTC-USD) slipped to below $39,000 on Thursday after the World Bank refused El Salvador’s request to help with the implementation of the cryptocurrency as a legal tender. The value of BTC has depreciated about 0.4% in the last 24 hours.
Last week, the Latin American country’s president, Nayib Bukele, tweeted a reveal of his El Salvador Bitcoin plan :
He deflected concerns about the cryptocurrency’s environmental impact with another tweet that indicated the country would use clean energy for mining:
“Our engineers just informed me that they dug a new well, that will provide approximately 95MW of 100% clean, 0 emissions geothermal energy from our volcanos Starting to design a full #Bitcoin mining hub around it.”
Yet that wasn’t enough to prevent the World Bank crypto kibosh. The lender said it could not assist El Salvador’s Bitcoin plan due to the environmental impact of mining and transparency challenges. “We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes,” a spokesperson for the international lender told 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.”
I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos 🌋
This is going to evolve fast! 🇸🇻 pic.twitter.com/1316DV4YwT
— Nayib Bukele 🇸🇻 (@nayibbukele) June 9, 2021
El Salvador Bitcoin Plan Would Be a First
El Salvador is looking to offer more financial freedom to citizens who might not have access to traditional financial services. That makes sense as only 30% of citizens have access to such services. Folks there won’t have to use a government wallet to hold BTC. And while all businesses will have to accept Bitcoin, they won’t necessarily have to hold onto it.
What else is in the El Salvador Bitcoin plan, which makes the country the first in the world to accept the cryptocurrency as legal tender?
- The government is setting up a fund that will allow businesses to exchange BTC for U.S. dollars.
- This fund will hold $150 million and will regularly sell Bitcoin to replenish its resources.
- In addition to all of this, Bukele also revealed that investing in the economy of El Salvador can grant a person citizenship.
- He said that anyone that invests 3 BTC, or about $117,0000 as of this writing, into the economy will obtain citizenship in the country.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor. His Substack newsletter, TLV Strategist, covers the Israel business scene.