Wednesday, May 22, 2024

US Senators Express Concerns over El Salvador’s Bitcoin Adoption – What’s Going On There?

American senators are calling for a risk study on the potential effects on bilateral economic relations and law enforcement cooperation in response to El Salvador’s adoption of Bitcoin as legal cash. 

Last month, Senators Bob Menendez and Jim Risch introduced a Bipartisan bill that calls for the State Department to produce a report on El Salvador’s utilization of Bitcoin.

Introduced as a legislative proposal in February of the preceding year, the Accountability for Cryptocurrency in El Salvador (ACES) Act is currently being pursued by American lawmakers. Their objective is to examine the impact of El Salvador’s adoption of Bitcoin on various aspects, including the country’s democratic governance, economic stability, and cybersecurity risks.

Risch voiced alarm about the effects of El Salvador’s decision to accept Bitcoin as legal cash in a blog post for the Foreign Relations Committee, saying that it might undermine economic and financial stability. Added him:

Considering the United States’ focus on promoting prosperity and transparency in Central America, it is crucial to gain a deeper understanding of the potential effects of adopting Bitcoin as legal tender on El Salvador’s financial and economic stability. Additionally, it is important to assess how this move may impact El Salvador’s ability to effectively combat money laundering and illicit financial activities.

El Salvador Keeps Up the Pressure on Bitcoin Strategy

El Salvador gained global attention in the year 2021 by becoming the pioneering country to officially recognize Bitcoin as a lawful form of currency.

Since then, the nation has kept up its Bitcoin campaign, with President Nayib Bukele buying substantial digital currency.

Bukele even declared that he would start purchasing one Bitcoin every day on November 18 in mid-November.

The nation currently holds an estimated 2,381 BTC, valued at $65 million and purchased at an average cost of $43,357.

Bukele’s Bitcoin experiment has received admiration in the cryptocurrency community but criticism from organisations like the World Bank and the International Monetary Fund. 

Saifedean Ammous, a well-known economist and the author of “The Bitcoin Standard,” was most recently invited to El Salvador as an economic counsellor to the National Bitcoin Office (ONBTC), a body overseeing all cryptocurrency-related issues in the nation.

In collaboration with well-known Bitcoiners Stacy Herbert and Max Keiser, President Nayib Bukele she established El Salvador’s National Bitcoin Office in the latter half of 2022. 

Meanwhile, there have been conflicting stories about how quickly Bitcoin has taken off in the tiny Central American nation.

Government statistics show that less than 2% of all remittances to El Salvador are made in cryptocurrency. 

Remittances, primarily contributed by Salvadorans residing overseas, constitute a substantial portion of the nation’s revenue.

In reality, the government asserted that BTC would increase alternatives and convenience for people sending and receiving remittances for the same reason.

The country has introduced a dedicated app specifically designed to streamline the process of remitting BTC from overseas, demonstrating its commitment to facilitating more accessible and more efficient Bitcoin transactions. But according to data from the previous year, only 2 out of 10 app users are still using it.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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