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Sunday, 21 July 2024

World Bank’s own charter might obligate it to accept BTC, even if it refuses to provide further assistance with crypto adoption

El Salvador requested the World Bank’s help with its transition to add Bitcoin as legal tender. The World Bank flatly refused. However, the World Bank’s own charter may force it to at least accept Bitcoin, if nothing else.

The World Bank’s excuses for rejecting El Salvador’s request were the following, according to Yahoo Finance, “While the [Salvadorian] government did approach us for assistance on bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings”.

RELATED: Bitcoin and ecology: What activists forgot

On their website, the World Bank specifies their “Environmental and Social Policies”, saying,

When we provide governments with financing to invest in projects — such as building a road, connecting people to electricity, or treating waste water — we aim to ensure that the people and the environment are protected from potential adverse impacts. We do this through policies that identify, avoid, and minimize harm to people and the environment. These policies require the borrowing governments to address certain environmental and social risks in order to receive World Bank support for investment projects. We know from experience that including environmental and social considerations into project design and implementation improves development outcomes.

According to the “International Bank for Reconstruction and Development” Articles of Agreement, which is found on the World Bank’s website,

SECTION 12. Form of Holdings of Currency
The Bank shall accept from any member, in place of any part of the member’s currency, paid in to the Bank under Article II, Section 7 (i), or to meet amortization payments on loans made with such currency, and not needed by the Bank in its operations, notes or similar obligations issued by the Government of the member or the depository designated by such member, which shall be non-negotiable, non-interest-bearing and payable at their par value on demand by credit to the account of the Bank in the designated depository.

World Bank

For those who do not speak legalese, it basically is saying that “The [World] Bank shall accept from any member [in this case, El Salvador]… notes or similar obligations issued by the Government of [El Salvador] or the depository designated by [El Salvador]…”

Thus, it seems that the World Bank may be forced to accept Bitcoin (or at least an asset derived from Bitcoin) from El Salvador.

Additional assistance from the World Bank related to Salvadorian BTC adoption, on the other hand, probably faces a more uphill battle.

This article by Martin Leo Rivers in Forbes lays out a case for why the World Bank must accept Bitcoin, plus how the environmental standard held for Bitcoin by the World Bank is apparently different from the standards which it has held for its own fossil fuel investments in the recent past.

As far as the World Bank’s transparency concerns go, Rivers says that Bitcoin’s nature as a distributed public ledger makes it, “by far, the most transparent monetary network that has ever existed.”

Bitcoin’s transaction history can be easily viewed by visiting a BTC block explorer website. However, instead of actual names, the transactions record what the public keys of the senders and recipients were. As soon as an investigator is able to link one’s public key to their actual identity, then the investigator is able to know their entire transaction history for that address. Privacy coins, on the other hand, (like Monero, Zcash, Dash, and Pirate Chain, among others) use technological means to (so far as possible) hide the transaction histories and/or balances while still retaining the anti-double-spend property of Bitcoin.

Despite the above, Reuters reports that a spokesperson for the World bank said, “We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes”.

Jonathan A. McCormick, Jr.
Techie. Entrepreneur. Free thinker. Senior International Correspondent for Liberland Press.

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