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US Senate to address risks of Bitcoin (BTC) adoption in El Salvador

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Republican and Democratic Senators have joined forces to introduce a bill on the risks of El Salvador’s adoption of Bitcoin (BTC). If the bill is passed, the US Secretary of State will have to report back within 30 days. El Salvador’s president reacted strongly, saying his country is not a US colony.

The US Senate is interfering in El Salvador’s affairs

Following a warning from the US Undersecretary of State last July, three US Senators from opposite parties introduced a bill on 15 February to analyse the risks of El Salvador adopting Bitcoin (BTC).

The document was proposed by Republican Senators Jim Risch and Bill Cassidy and Democratic Senator Bob Menendez under the name “Accountability for Cryptocurrency in El Salvador” or “ACES Act”.

In broad terms, the bill calls for a State Department report on “the extent of cryptocurrency use” in El Salvador, but also on the risks of piracy involved, how funds are secured, and an analysis of the population to determine how much of the de-banked Salvadorans can access Bitcoin and under what conditions.

Beyond security issues, it seems that the US senators are most concerned about a potential shift from the US dollar to Bitcoin. Indeed, it is written in black and white in the bill:

” The bill is not a law, it is a law.

“The report of the bill must include the following elements: […] El Salvador’s economic and trade relations with the United States and the possibility of El Salvador using the US dollar less. […] A plan to limit the risks posed by the adoption of cryptocurrencies in certain countries vis-à-vis the U.S. “

A plan not well received by Nayib Bukele

Such a report could amount to US interference, as it requires data on El Salvador’s population, an analysis of the country’s relationship with the International Monetary Fund (IMF) and the World Bank, and questions “the possibility of using cryptocurrencies to circumvent US sanctions.”

According to Senator Jim Risch, the risk of destabilising the US financial system is enough to demand this report:

This new policy has the potential to weaken US sanctions policy, as it empowers bad actors like China and organised crime. Our legislation calls for light to be shed on El Salvador’s policy and demands that the administration mitigate the potential risk to the US financial system. “

The news was not well received by Nayib Bukele, the president of El Salvador, who reacted strongly from his Twitter account, saying that his country was independent:

“Ok boomers… You have no right to a sovereign and independent nation. We are not your colony, your backyard or your garden. Stay out of our internal affairs. Don’t try to control something that is out of your control.

If passed, the US Secretary of State will have 60 days to submit the requested report.

El Salvador stands firm

El Salvador has been a leader in the adoption of Bitcoin, but it keeps getting roadblocks. The IMF, for example, recently threatened to withhold loans if it did not abandon Bitcoin. The IMF has never hidden its concerns about the adoption of crypto-currencies, citing “the risk of cryptoization” for emerging countries just over two weeks ago.

However, the Republic of El Salvador is standing firm and continuing to develop Bitcoin among its population. In July, it floated the idea of a stablecoin backed by the dollar, and earlier this year it announced that it would provide Bitcoin loans to small businesses.

Earlier this month, cryptocurrency exchange Paxful chose El Salvador as the location for its Bitcoin education centre to facilitate adoption among the surrounding population.

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