CABEI Offers Assistance to Support El Salvador’s Bitcoin Adoption

The Central American Bank for Economic Integration (CABEI) head said that the multinational development bank would offer technical assistance to El Salvador to implement Bitcoin as legal tender, Reuters reported Monday.

In a press conference held Monday, Dante Mossi, the executive president of CABEI, said that the development bank would collaborate with El Salvador’s finance ministry and central bank to select a technical team to implement.

El Salvador’s government sought assistance from the institution in implementing Bitcoin cryptocurrency as a legal tender currency in the country. Mossi confirmed this at the press conference.

"We feel very proud that your government's first choice in soliciting help and support with the implementation is the Central American Bank for Economic Integration," he delivered the message to El Salvador President and his government.

Mossi further acknowledged that no other nation had adopted Bitcoin as widely as El Salvador has done. He admitted that it is a challenge that must find the best way to protect the public. 

Mossi revealed the bank’s technical advisory group would be formed involving members of CABEI and officials from El Salvador’s central bank and ministry of finance. The bank also intends to help offer project planning and assistance navigating the legal aspects of implementing Bitcoin as El Salvador’s currency.

CABEI was jointly established in 1960 by El Salvador, Nicaragua, Gaugamela, Costa Rica, and Honduras works as a multinational development bank financial institution.

Its non-founding members include Belize, the Dominican Republic, and Panama, while other extra-regional members join, such as South Korea, Argentina, Mexico, and Spain.

Bitcoin Adoption Challenges

Last week, El Salvador became the first nation to adopt Bitcoin as a legal tender after Congress approved President Nayib Bukele’s proposal to embrace the cryptocurrency.

President Bukele submitted the bill to Congress after he announced early this month that El Salvador partnered with digital wallet company Strike to develop the nation’s modern financial infrastructure using Bitcoin technology.

A few days later, the President of El Salvador announced that the country’s state-run geothermal energy utility would start using power generated from volcanoes to operate Bitcoin mining. The announcement was made just hours after the Central American country’s congress voted to make the crypto an acceptable legal tender.

However, the IMF (International Monetary Fund) warned El Salvador about the risks of using cryptocurrency for day-to-day transactions. An IMF team scheduled to meet with El Salvador’s president as the international organisation weighs another relief package for the nation amid its recovery from the coronavirus pandemic.

Meanwhile, President Bukele disclosed that he was in talks with the IMF and stated that he would explain the workings in detail and the status of the economy now that how the currency works a legal tender in the nation.