Several U.S. lawmakers have introduced a bill to mitigate the risks from El Salvador adopting bitcoin as legal tender. “El Salvador recognizing bitcoin as official currency opens the door for money laundering cartels and undermines U.S. interests,” said a U.S. senator.
US Concerned About Risks From El Salvador’s Bitcoin Law
The U.S. Senate Committee on Foreign Relations announced Wednesday that Senators Jim Risch (R-Idaho), Bob Menendez (D-N.J.), and Bill Cassidy (R-La.) have introduced a bill titled the ‘‘Accountability for Cryptocurrency in El Salvador Act’’ or ‘‘ACES Act.’’
The proposed legislation requires a report from the State Department on El Salvador’s adoption of bitcoin as legal tender and “a plan to mitigate potential risks to the U.S. financial system,” the announcement details. The State Department report would include an analysis of El Salvador’s bitcoin adoption as legal tender and the risks for cybersecurity, economic stability, and democratic governance in El Salvador.
Senator Risch commented:
El Salvador’s adoption of bitcoin as legal tender raises significant concerns about the economic stability and financial integrity of a vulnerable U.S. trading partner in Central America.
He added: “This new policy has the potential to weaken U.S. sanctions policy, empowering malign actors like China and organized criminal organizations. Our bipartisan legislation seeks greater clarity on El Salvador’s policy and requires the administration to mitigate potential risk to the U.S. financial system.”
Senator Cassidy opined:
El Salvador recognizing bitcoin as official currency opens the door for money laundering cartels and undermines U.S. interests.
Responding to the bill’s introduction, El Salvador’s president, Nayib Bukele, tweeted:
OK boomers… You have 0 jurisdiction on a sovereign and independent nation. We are not your colony, your back yard or your front yard. Stay out of our internal affairs. Don’t try to control something you can’t control.
El Salvador adopted bitcoin as legal tender alongside the U.S. dollar in September last year. Since then, the country has purchased 1,801 BTC altogether.
The U.S. is not the only country concerned about El Salvador’s Bitcoin law. In November last year, Bank of England (BOE) Governor Andrew Bailey raised concerns about bitcoin being used as legal tender in El Salvador.
Furthermore, the International Monetary Fund (IMF) has repeatedly urged the country to abandon bitcoin as legal tender. According to the IMF, the costs of making BTC legal tender exceed the potential benefits.
El Salvador, however, does not see a reason to scale back its Bitcoin law. In fact, President Bukele has predicted that two more countries will adopt BTC as legal tender this year.
What do you think about the U.S. introducing a bill to mitigate the risks from El Salvador adopting bitcoin as legal tender? Let us know in the comments section below.