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The US lawmakers believe that countries that adopt Bitcoin such as El Salvador, may pose certain risks to the US.
Since El Salvador adopted Bitcoin as a legal tender, this has raised concerns from governments of other countries, including the US, who think the decision may affect them. In a recent move, two members of the US House of Representatives introduced a new bill to protect the US financial system due to El Salvador’s Bitcoin adoption. Notably, El Salvador president Nayib Bukele formally announced Bitcoin as a legal tender within the country in September 2021.
The two lawmakers- Arkansas Representative Rick Crawford and California Representative Norma Torres, submitted the proposed legislation on the 4th of April. According to the press release, the bill is the “Accountability for Cryptocurrency in El Salvador (ACES) Act to mitigate the risks to the United States of El Salvador’s adoption of Bitcoin as legal currency.” The latest Act accompanies the initial bipartisan legislation the Senate introduced in February.
The Senate bill called for a report from the Secretary of State, Federal department, and agency heads within 60 days. The report is expected to mitigate any potential risk El Salvador may cause the US. The US lawmakers believe that countries that adopt Bitcoin such as El Salvador, may pose certain risks to the US. Furthermore, the Senate bill also referred to countries that accept the USD. They include Zimbabwe, Palau, Micronesia, Ecuador, Marshall Islands, and East Timor.
US Lawmakers Introduce Bill to ‘Mitigate Risks’ Posed by El Salvador Over Bitcoin Adoption as Legal Tender
According to Torres, financial institutions globally have researched and documented several dangers associated with El Salvador’s decision on BTC. The Congresswoman added that the international community also recognizes the possible risks. Speaking, she referred to El Salvador as an “independent democracy,” and the US government acknowledged its right to self-rule. However, Torres added that the US need a plan to protect its financial systems from all kinds of risks. The politician noted that El Salvador’s Bitcoin decision appears as a “careless gamble” other than a philosophical innovation.
In addition, Representative Crawford said that the growing crypto popularity calls for proper regulation and consumer protection. He continued:
“El Salvador’s hasty decision to adopt Bitcoin as legal tender causes concern for the stability of the US-Salvadorian economic relationship. It is our job as policymakers to better understand the potential effects of the adoption of Bitcoin as legal currency in El Salvador and what the US can learn going forward.”
The International Monetary Fund (IMF) referred to El Salvador’s Bitcoin decision as a huge risk to financial stability. The IMF also showed concern over consumer protection. Eventually, the Fund did not lend to El Salvador as a result of the nation’s latest legal tender. At the same time, an estimation by Moody’s Sovereign Risk Group revealed that El Salvador may have lost up to $22 million during a recent dip in the crypto market.