US Senators Propose New Legislation to Mitigate Potential Risks of El Salvador’s Bitcoin (BTC) Adoption

The Senate Foreign Relations Committee ranking member Jim Risch, Chairman Bob Menendez, and Bill Cassidy want the US to monitor El Salvador. They have introduced the ACES Act to help mitigate the potential side effects of Salvador’s crypto adoption to the US. President Bukele has reiterated that they should stay away from his government.

Senators Want the US Government to Monitor Salvador’s BTC Adoption Effects on the US.

Three US Senators have introduced the Accountability for Cryptocurrency in El Salvador Act (ACES Act)  to monitor the side effects resulting from crypto adoption in Salvador. If the bill is passed, the US will form a State Department to report on Salvador’s BTC moves and plans to mitigate its effects on the US financial system.

The bill states that in less than 90 days, the Secretary of State and other heads of relevant Federal Departments shall forward a report to Congress. The report will be forwarded to all relevant committees of Congress and should contain a plan to mitigate potential risks from Salvador’s crypto adoption.

Risch, one of the senators who proposed the bill, said that Salvador’s adoption of BTC as legal tender raises concerns about their US relations. He continued that the new El Salvador policy can weaken US sanctions and empower malign players like China and criminal organizations. 

What Is in the Bill?

The proposed Bipartisan legislation seeks to clarify Salvador’s policy and mitigate potential risks to the US financial system. The report authorized by the bill should also include potential risks to the US financial system caused by any other country that uses the US dollar as its legal tender. It should also contain key information on Salvador’s process of adopting BTC as a legal tender. 

 The report should offer a detailed examination of how the adoption of BTC as legal tender in the country has affected the businesses there. For example, it should handle how El Salvador planned to adopt BTC, the usage of cryptocurrency among citizens, and the country’s ability to mitigate cyber threats.

The State Department should also include contextual information in the report, like how many Salvadorans are unbanked. It should detail the remittance flow between Salvador and the US. Also, it should shed more light on Salvador’s bilateral economic and financial relationship with the US.

In the sector of economic relations, the report should disclose the effects of the reduced use of the US dollar by Salvadorans. It should also include the relations between Salvador and international funding organizations like the IMF and the World Bank and the possibility of using cryptos to circumvent US sanctions.

Bukele Hits Back at US Senators Regarding the Bipartisan Legislation

Upon receiving the news, El Salvador’s President Nayib Bukele reacted with a tweet asking the Senators to stay off his country’s affairs. He told them they had no jurisdiction over a sovereign and independent country.

Bukele added that Salvador is not a US colony, backyard, or front yard, so its legislation has no power there. While concluding, he warned that they should not try to control something that they cannot control. 

Since Salvador invested in BTC and made it legal tender, they have received continuous criticism but stood firm on their decision. Even though they have been making losses due to the ongoing dip, it remains to be seen how the country will hold up in the future.