The World Bank rejected El Salvador's request for help with its Bitcoin (BTC) legal tender implementation last week, given the environmental and transparency drawbacks. A World Bank spokesperson wrote: "We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes. While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings."
Salvadoran Finance Minister Alejandro Zelaya said Wednesday that the Central America country had sought technical assistance from the Bank to use Bitcoin as a parallel legal tender alongside the U.S. dollar (USD). He added that ongoing negotiations with the International Monetary Fund (IMF) had been successful, though the IMF said last week it saw "macroeconomic, financial and legal issues" with El Salvador's adoption of Bitcoin. Investors recently have demanded higher risk premiums to hold Salvadoran debt due to growing concerns over the completion of an IMF deal that would help bridge budget gaps through 2023 for the developing country, which hopes its embrace of Bitcoin will attract greater foreign investment.
Here is the rest of the week in review:
Sichuan, a populous central Chinese province, became the latest province in the country to ban crypto mining. The Sichuan branch of the National Development and Reform Commission and the Sichuan Energy Bureau on Friday issued an order to crack down on mining operations. Sichuan, which is one of the largest hydro-based crypto mining hubs in China, is joining other provinces including Inner Mongolia, Xinjiang, Qinghai, and Yunnan in cracking down on crypto mining. A number of provinces have been cracking down on mining operations within their borders. Municipal governments, city governments, and energy providers like the State Grid Corporation of China, in Sichuan will lead the prohibition. Local authorities plan to shut down 26 firms that have the State Grid has identified as potential crypto mining businesses. The companies are located across 15 counties in 5 cities and regions in Sichuan and will be shut down by June 20. Meanwhile, Sichuan's municipal governments will immediately carry out inspections of suspected firms, and those found to be mining will be shuttered.
Venture capital is betting big on the crypto space, with VC funds having already invested a record $17 billion into the crypto sector in 2021, according to a Bloomberg report. The previous annual record was 2018 with a total of $7.4 billion, and 2021 has managed to bring in the combined investment amount of all previous years combined since 2010. According to market data firm PitchBook, VC funds have been extremely active with their investments into the crypto asset class. The largest deal this year saw a whopping $10 billion from Block.One, which invested in crypto exchange Bullish Global. The startup exchange also raised an extra $300 million in a funding round, and the single deal broke the record for a standalone crypto investment. Other notable investments of 2021 include a $380 million funding round for crypto wallet firm Ledger, $350 million in BlockFi and Dapper Labs, and $300 million in Paxos and Blockchain.com. The report suggests the VC appetite for crypto exposure keeps growing.
Crypto prices dipped to $1.45 trillion this week, as Bitcoin approaches a bearish "death cross." For the majors, all except stablecoins ended in the red. In the top 100, the biggest losers were Kusama (KSM), down 29%, Internet Computer (ICP), down 25%, and Siacoin (SIA), down 18%. The biggest gainers were Amp (AMP), up 60%, XinFin Network (XDC), up 42%, and Quant (QNT), up 28%.
The author owns a small amount of BTC.