US Senators Concerned About El Salvador’s Bitcoin Adoption.
The decision of El Salvador to adopt Bitcoin as a legal tender has raised concerns among American lawmakers, who are urging for a report on the potential impact on economic relations and law enforcement cooperation between the two countries.
Last month, US Senators Jim Risch and Bob Menendez reintroduced a bipartisan bill calling for a State Department report on El Salvador’s Bitcoin adoption.
The bill, known as the Accountability for Cryptocurrency in El Salvador (ACES) Act, was first introduced in February last year.
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American lawmakers want an analysis of the risks for cybersecurity, economic stability, and democratic governance in El Salvador due to the country’s adoption of Bitcoin.
In a blog post on the Foreign Relations Committee, Risch expressed concern over the implications of El Salvador adopting Bitcoin as a legal tender, stating that it could weaken economic and financial stability. He added:
“Given the US interest in prosperity and transparency in Central America, we must seek greater clarity on how the adoption of Bitcoin as legal tender may impact El Salvador’s financial and economic stability, as well as El Salvador’s capacity to effectively combat money laundering and illicit finances.”
El Salvador Continues to Double Down on Its Bitcoin Strategy
El Salvador made headlines in 2021 when it became the first country to make Bitcoin legal tender.
The country has since continued its Bitcoin push, with President Nayib Bukele purchasing large amounts of the cryptocurrency.
In mid-November, Bukele announced that he will begin buying one Bitcoin per day starting from November 18.
As of now, the country is estimated to have around 2,381 BTC, worth around $65 million, acquired at an average price of $43,357.
Bukele’s Bitcoin experiment has been praised in the cryptocurrency world, but criticized by institutions like the International Monetary Fund and the World Bank.
More recently, El Salvador welcomed Saifedean Ammous, a prominent economist and author of “The Bitcoin Standard,” as an economic advisor to its National Bitcoin Office (ONBTC), an entity that manages all cryptocurrency-related matters in the country.
El Salvador’s National Bitcoin Office was created by President Nayib Bukele in late 2022 in conjunction with known Bitcoiners Stacy Herbert and Max Keiser.
Meanwhile, reports about the adoption of Bitcoin in the small Central American country have been mixed, with indications that it has been slow to take off.
According to government figures, cryptocurrency accounts for less than 2% of all remittances made to El Salvador.
Remittances, mostly from overseas-based Salvadorans, are a major source of income for the country.
In fact, the government promised that Bitcoin would provide more options and greater convenience for those sending and receiving remittances. The country even launched a dedicated Bitcoin app, designed largely to facilitate Bitcoin remittances from overseas. However, data from last year showed that only two in 10 people who initially downloaded the app are still using it.