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

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

The head of the Central American Bank for Economic Integration (CABEI) said Monday the bank would provide technical assistance to El Salvador in adopting Bitcoin as legal tender, even though it still only issues debts in dollars.

El Salvador last week became the first country to pass a law making cryptocurrency legal tender, sparking praise for the bold move in the small economy as well as concern over its talks about an agreement with the International Monetary Fund. Continue reading

CABEI executive president Dante Mossi said the move would provide many opportunities for Salvadorans, including lowering the cost of overseas relatives to send money transfers.

“We are very optimistic,” he said at a virtual press conference from Honduras.

Mossi added the bank will work with the El Salvador Ministry of Finance and the central bank to select a team to implement it.

When asked if CABEI would accept payments in Bitcoin, Mossi noted that the bank currently only trades in dollars.

“All of the bank’s debts are still in dollars,” he said. El Salvador has said that it will continue to accept dollars and that the use of Bitcoin will be voluntary and tied to the dollar rate. Mossi also called on the El Salvador government to develop a regulatory framework to control who uses Bitcoin and to prevent “bad actors” from exploiting the system’s anonymity.

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