World Bank forced to accept payments in Bitcoin
The 1944 constitutive document of the financial entity reflects its commitment to receive payments in the local currency of the member states, which confirms that the World Bank is obliged to accept payments in bitcoin from this country
The World Bank will not provide technical assistance to El Salvador in the process of adopting Bitcoin (BTC) as a legal currency, due to transparency and the impact that digital mining generates on the environment. Nevertheless, the body would be forced to accept the cryptocurrency as a form of payment for that nation.
The Constitutive Document of the World Bank, which dates from 1944, defines the procedures and principles with which the financial entity is committed to collaborate with the member states. Specifically, in section 12 of article V of the legal instrument it establishes World Bank forced to accept payments in Bitcoin.
“The Bank will accept from any member, in lieu of any part of the member’s currency, paid to the Bank pursuant to Article II, Section 7 (i), or to meet loan repayment payments made with such currency, and not necessary by the Bank in its operations, notes or similar obligations issued by the Government of the member or the depositary designated by said member, which will be non-negotiable, not accrued interest and payable at their face value on demand by credit to the Bank account in the designated depository (Articles of Agreement of the World Bank).”
The document also foresees the action of the World Bank in case of currencies with a lot of fluctuation in the market, such as the case of Bitcoin and in section 9 of the article it was established that acquisitions or holdings canceled in the bank by the governments that comprise it must continually revalue. Taking the US dollar as a reference for being relatively stable, and if there is a revaluation of the local currency, the Bank must “do what is decent and return the profits.”
If, on the other hand, there is a devaluation in the local currency, the Member State has to “pay the Bank within a reasonable time an additional amount of its own currency sufficient to maintain the value.”
Everything will depend on the decision of the multilateral organization to respect or not the right that El Salvador has to choose its local currency.