U.S. Targets El Salvador in New Crypto Bill

El Salvador has long been a bitcoin advocate. The currency is a national form of payment within its borders, but while the president of the nation may be pleased about the prospects, there are many other leaders in the United States and other countries that think the current situation is a bad one.

El Salvador and Bitcoin Are Getting on the U.S.’s Bad Side

Recently, a handful of senators and lawmakers in the U.S. – including Bob Menendez of New Jersey (a democrat) and Jim Risch of Idaho (a republican) – criticized El Salvador for walking what they referred to as a thin monetary path, and they issued a new form of legislation designed to get the country to fess up and account for its actions.

Known as the Accountability for Cryptocurrency in El Salvador Act, the bill is designed to get El Salvador to produce a new report that talks about how it’s using crypto and what it’s doing to ensure users are safe.

The document the nation is required to produce should also detail all the security risks of having bitcoin as legal tender. It should also talk about economic stability and democratic governance surrounding bitcoin use and issuance. In an interview, Risch said:

Using cryptocurrency as legal tender could weaken economic and financial stability and empower malign actors. Given U.S. interest on prosperity and transparency in Central America, we must seek greater clarity on how the adoption of bitcoin as legal tender may impact El Salvador’s financial and economic stability, as well as El Salvador’s capacity to effectively combat money laundering and illicit finances.

El Salvador has been running on the bitcoin hamster wheel for about two years. The nation was the first in the world to declare bitcoin legal tender, having done so in September of 2021. The nation did all it could to ensure bitcoin could be utilized for payments so that U.S. dollar use could ease down and potentially be done away with for good.

But while things may have looked good on paper at first, the maneuver has run into some problems. The country has run up quite a bit of bitcoin-related debt over the past year thanks to the crypto winter of 2022 that caused the world’s number one digital currency  by market cap to lose more than 70 percent of its value. Several residents, fearing the criminality that is often tied to bitcoin use, have also protested in the streets of the nation’s capital.

Dismissing the Worries

Bukele has often pushed aside the concerns of lawmakers in the U.S. that surround his country’s bitcoin journey. On Twitter in 2022, he wrote:

Never in my wildest dreams would I have thought that the US government would be afraid of what we are doing here. The US government DOES NOT stand for freedom.

Tags: bitcoin, El Salvador, United States