Development bank backs El Salvador bitcoin law; says debt still in dollars

Roberto Carlos Silva, owner of La Zontena store, poses at his business where he accepts Bitcoins at El Zonte Beach in Chiltiupan, El Salvador June 8, 2021. REUTERS/Jose Cabezas/Files

The head of the Central American Bank for Economic Integration (CABEI) said on Monday the bank will give El Salvador technical assistance to implement bitcoin as legal tender, even though it still issues debt only in dollars.

El Salvador last week became the first country to pass a law making the cryptocurrency legal tender, sparking praise for the bold move in the small economy as well as concern over its discussions for a deal with the International Monetary Fund. read more

CABEI’s executive president, Dante Mossi, said the move would offer Salvadorans many opportunities, including lowering the cost for relatives abroad to send remittances.

“We’re very optimistic,” he told a virtual news conference, speaking from Honduras.

Mossi added the bank will work with El Salvador’s finance ministry and central bank to select a team to work on the implementation.

When asked if CABEI would accept payments in bitcoin, Mossi noted the bank at present deals only in dollars.

“All of the bank’s debt is still denominated in dollars,” he said. El Salvador has said it will still accept dollars, and that bitcoin use will be by choice and tied to the dollar exchange rate.
Mossi also called on El Salvador’s government to develop a regulatory framework to control who is using bitcoin and prevent “bad actors” who take advantage of the system’s anonymity.

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