As El Salvador continues to attract more tourists due to its Bitcoin-friendly policies, US lawmakers are raising concerns about potential risks posed by the nation’s adoption of the cryptocurrency. US lawmakers Jim Risch (R-Idaho) and Bob Menendez (D-N.J.), ranking member and chairman of the Senate Foreign Relations Committee, reintroduced a bipartisan bill requesting a State Department report on the impact of El Salvador’s Bitcoin adoption on bilateral economic relations and law enforcement cooperation.
US lawmakers wary of El Salvador’s Bitcoin-friendly stance
The Accountability for Cryptocurrency in El Salvador (ACES) Act, initially introduced in February last year by Risch, Menendez, and Bill Cassidy (R-La.), aims to shed light on the consequences of Bitcoin becoming legal tender in El Salvador. The US lawmakers are particularly interested in understanding the risks associated with cybersecurity, economic stability, and democratic governance in the country.
El Salvador gained global attention in 2021 when it became the first country to adopt Bitcoin as a legal tender. President Nayib Bukele, a proponent of the cryptocurrency, has acquired significant amounts of Bitcoin, and businesses within the country are required by law to accept Bitcoin as payment if they possess the necessary technological infrastructure.
While President Bukele’s Bitcoin experiment has received praise from cryptocurrency enthusiasts, international institutions like the International Monetary Fund and the World Bank have expressed concerns. In response to these concerns, El Salvador’s National Bitcoin Office (ONBTC) has appointed Saifedean Ammous, author of “The Bitcoin Standard,” as its newest economic advisor.
The lawmakers want a bill to regulate Bitcoin risks
El Salvador has witnessed a significant decline in its homicide rate, once one of the highest in the world, following the Bukele government’s efforts to combat street gangs. This security improvement has attracted tech enthusiasts and surfers to the country. However, human rights groups have criticized the government for alleged authoritarian practices, citing mass incarcerations of criminals.
Coinciding with these developments, US lawmakers appear to be taking a stricter stance on Bitcoin. Since the collapse of the FTX digital asset exchange in November, American regulators have increased regulatory scrutiny, making it more challenging for cryptocurrency companies to operate within the country. Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission, has stated that Bitcoin is considered a commodity. Bitcoin and the broader cryptocurrency industry are expected to be key topics in the upcoming U.S. presidential election. Governor Ron DeSantis of Florida, a potential candidate, has expressed his support for Bitcoin.
As American lawmakers seek a comprehensive risk assessment of El Salvador’s Bitcoin adoption, the outcome of the report could influence future regulatory decisions regarding cryptocurrencies in the United States. While El Salvador’s Bitcoin experiment continues to generate both praise and criticism, the evolving landscape of digital currencies is poised to play a prominent role in shaping global financial systems and political agendas in the years to come.