After passing an initial bill last month, some US lawmakers are once again pressing El Salvador’s Bitcoin law with legislation to protect US financial interests. They say El Salvador’s adoption of Bitcoin has the potential to destabilise the US financial system.
New bill to protect US financial system
While El Salvador adopted Bitcoin (BTC) as a legal tender last year, the United States remains concerned about the impact of the move on its own financial system. On Monday 4 April, US lawmakers proposed a new bill called the Accountability for Cryptocurrency in El Salvador Act.
The bill was introduced by Congresswoman Norma J. Torres and Congressman Rick Crawford. Through a statement released in a tweet, Congresswoman Torres stated that the bill was necessary to protect the US financial system from El Salvador’s “reckless gambling”.
Responses to her tweet were swift, with much criticism directed at her.
Today, I introduced the Accountability for Cryptocurrency in El Salvador Act with @RepRickCrawford El Salvador’s adoption of Bitcoin is not a thoughtful embrace of innovation, but a careless gamble that is destabilizing the country. https://t.co/Ag9K8fyHMb pic.twitter.com/4N8DN7895w
– Rep. Norma Torres (@NormaJTorres) April 5, 2022
In her statement, the MP said:
“Salvador is the only country in the world that has not yet adopted a new law.
El Salvador is an independent democracy and we respect its right to self-government, but the United States must have a plan in place to protect our financial systems from the risks of this decision, which appears to be a reckless gamble rather than a thoughtful embrace of innovation.
The new legislation is intended to have the State Department produce an analysis of El Salvador’s adoption of Bitcoin as a legal tender and the “risks to cybersecurity, economic stability and democratic governance” in the country.
The Bitcoin law in El Salvador: a law that scares financial institutions
Last year, El Salvador announced that Bitcoin (BTC) would become the legal tender in the country. This was the first time a country had taken such a step, and it caused a stir in the mainstream media and financial institutions.
This groundbreaking law was the brainchild of the country’s president, Nayib Bukele. Through this Bitcoin law, the 40-year-old president’s objective, which is different from traditional politicians, was to attract investors and crypto traders to his country. All this with the aim of giving a new dynamic to the economy of El Salvador, which still suffers from a bad reputation for its security, since it was for a long time one of the most violent countries in Central America.
In fact, since the law was passed, local tourism has increased by 30% according to the El Salvador government.
But not everyone is happy with the young president’s plans. US lawmakers still want to keep an eye on the small Central American country, whose size of economy should not normally be a concern.
Congressman Jim Risch said in a statement:
The Bitcoin Act has the “potential to weaken U.S. sanctions policy, empowering bad actors like China and organized crime. “
In addition, both the International Monetary Fund (IMF) and the World Bank have criticised the Bitcoin law, and even called on the country to abandon it, due to the financial risks it would cause.
