UN commission serves new warning against BTC adoption in El Salvador

by Gordon James

The United Nations Commission on Sustainable Development (CSD) has warned that El Salvador could be “losing a chance to go green” by not embracing blockchain technology and cryptocurrency. In a report published yesterday, the UN Commission on Sustainable Development (CSD) warned that El Salvador could be “losing a chance to go green” by not embracing  blockchain technology and cryptocurrency. “El Salvador is losing a chance to go green by not embracing blockchain technology,”  said the UN Commission on Sustainable Development (CSD)  as it issued a report highlighting the country’s progress on green initiatives despite its poverty and lack of resources. “The country has made progress on several major environmental challenges, such as climate change, water and sanitation,

With El Salvador being one of the most prolific countries in Bitcoin adoption, it is no surprise that Bitcoin has been on the agenda of the United Nations Commission on Drugs and Crime. On May 27th, the commission released a new report warning against the adoption of Bitcoin in El Salvador, with regards to its use for illicit purposes.

The Economic Commission for Latin America and the Caribbean (ECLAC), the UN regional commission that promotes economic cooperation, is the latest regulator to express concern over El Salvador’s decision to introduce bitcoin (BTC) as legal tender.

ECLAC Executive Secretary Alicia Barsena has warned that El Salvador’s move to bitcoin poses a number of systemic risks, as well as money laundering risks, local news agency Diario El Mundo reported Friday.

Barsena noted that there is no study yet that examines the potential risks or benefits of introducing BTC as legal tender in El Salvador. She expressed confidence that El Salvador will likely face scrutiny and risk from the Financial Action Task Force on Money Laundering (FATF) for its decision to switch to bitcoin.

The official added that bitcoin cannot perform some of the basic functions of the currency and is prone to extreme volatility, which could cause many systemic risks in a dollarized economy.

Related: A survey shows that the majority of Salvadorans are sceptical about the introduction of BTC as legal tender.

With this warning, ECLAC joins a growing number of global agencies and organizations that are increasingly concerned about El Salvador’s decision to accept BTC as legal tender after Salvadoran President Nayib Buquele announced the historic legislation in early June. The International Monetary Fund was one of the first regulators to point out the problem afterwards, warning that the introduction of bitcoin as a legal currency in the country could lead to legal and financial problems.

The 17th. In June, the World Bank rejected El Salvador’s request for help in transitioning to bitcoin, due to concerns over bitcoin’s alleged environmental impact and transparency. Earlier, Bank of Russia Vice President Alexei Zabotkin also expressed concern about El Salvador’s bitcoin initiative, saying that larger economies are unlikely to follow the country’s call to adopt BTC as legal tender, as it poses risks to financial stability.

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