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US Senators introduces legislation to mandate plan to mitigate risks posed by El Salvador Bitcoin law

source-logo  fxstreet.com 17 February 2022 00:29, UTC
  • A group of US Senators proposed new legislation aiming to mitigate risks posed by El Salvador’s adoption of Bitcoin.
  • If passed, the bill would mandate the State Department to investigate El Salvador’s process to make Bitcoin as legal tender and how it affects its citizens.
  • According to the Senators, the Central American country’s Bitcoin law “raises significant concerns.”

A group of Senators in the United States has put forward legislation that requires the State Department to report and develop a plan to mitigate potential risks posed by El Salvador’s Bitcoin law.

El Salvador Bitcoin law ‘raises significant concerns’

Senate Foreign Relations Committee ranking member Jim Risch (R-Idaho), committee chairman Bob Menendez (D-N.J) and Bill Cassidy (R-La.) introduced the Accountability for Cryptocurrency in El Salvador (ACES) Act. 

The bill requires the State Department to report on El Salvador’s Bitcoin moves if the proposed legislation is passed. The proposal further mandates the production of a plan to “mitigate potential risks to the US financial system.”

According to the official press release, the senators believe that Central American country's Bitcoin law “raises significant concerns.” The proposed legislation further gives the State Department 60 days to generate a report on El Salvador’s adoption of the leading cryptocurrency if the bill passes.

The report would further investigate El Salvador’s “bilateral economic and commercial relationship with the United States and the potential for reduced use by El Salvador of the US dollar.”

Senator Risch said in a statement that El Salvador’s adoption of the bellwether cryptocurrency as legal tender raises significant concerns about the economic stability and financial integrity of a vulnerable US trading partner in Central America. 

Risch added that the new policy could potentially “weaken US sanctions policy, empowering malign actors like China and organized criminal organizations.”

El Salvador President Nayib Bukele responded to the proposed legislation, calling the Senators “boomers.” He added, “We are not your colony, your back yard or your front yard. Stay out of our internal affairs.”

The Bitcoin law in El Salvador, passed in September last year has been criticized by the International Monetary Fund (IMF) and the World Bank. The IMF further urged the Central American country to drop the crypto law last month.