Senators from both parties introduced legislation in the U.S. Senate to reduce perceived risks associated with El Salvador’s adoption and legalization of Bitcoin.
The Accountability for Cryptocurrency In El Salvador Act (ACES), as it is proposed, aims to “mitigate possible risks to the U.S. Financial System” such money laundering and terrorist funding.
Republican Senators Jim Risch, Bill Cassidy and Democratic Senator Bob Menendez introduced the bill. In the February 16 announcement, Senator Risch stated that:
“El Salvador’s adoption and use of Bitcoin as legal currency raises serious concerns about the economic stability of this vulnerable U.S. trading partner in Central America.”
Senator Cassidy stated that Bitcoin being recognized as an official currency opened the door to money laundering cartels and undermines U.S. interest.”
The bill would allow Federal agencies to submit reports within 60 days if it passes. It would assess several aspects of the Central American nation’s cybersecurity and financial stability capabilities.
The report’s first section would examine how El Salvador created and enacted Bitcoin Law. It will also assess how El Salvador will “mitigate financial integrity and cybersecurity risks” from virtual assets. It will also evaluate whether the law meets Financial Action Task Force requirements. It will also discuss the impact on individuals, businesses, and what crypto will do to its economy.
The report’s next section would discuss El Salvador’s internet infrastructure. It would also assess the possibility of hacking, custody of funds, and the risk of hackers.
The bill would outline action plans for various agencies that were based on these findings after they are issued.
Nayib Bukele, El Salvador’s President, reacted to the interference by tweeting: “You have zero jurisdiction over a sovereign and unattached nation.” We are not your colony or your backyard, nor your front yard.
OK boomers… you have zero jurisdiction over a sovereign, independent nation. We are not your colony or your backyard. Keep out of our internal affairs. Don’t try to control something you can’t control https://t.co/pkejw6dtYn
— Nayib Buukele (@nayibbukele), February 16, 2022
In June 2021, El Salvador’s government approved the Bitcoin Law. The Bitcoin Law was passed in June 2021, making Bitcoin (BTC), a legal currency, available for payment by businesses.
Related: What is shaping the future institutional crypto market?
Domestic lawmakers and the IMF have reacted to the law with some resistance. The IMF urged President Bukele several times to repeal the Bitcoin Law, including on Jan. 25, 2017. Proponents of the largest crypto market capital in the world have praised it.
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