US Senators Express Concerns over El Salvador’s Bitcoin Adoption – What’s Going On?
El Salvador’s adoption of Bitcoin as a legal tender has caused concern among American lawmakers, who are calling for a risk report on the potential impact on bilateral economic relations and law enforcement cooperation.
Last month, US Senators Jim Risch and Bob Menendez reintroduced a bipartisan bill requesting a State Department report on El Salvador’s Bitcoin adoption.
The bill, dubbed the Accountability for Cryptocurrency in El Salvador (ACES) Act, was initially introduced in February last year.
American lawmakers want an analysis of El Salvador’s adoption of Bitcoin and the risks for cybersecurity, economic stability, and democratic governance in the country.
In a Foreign Relations Committee blog post, Risch expressed concern regarding the implications of El Salvador’s move to adopt Bitcoin as legal tender, claiming that it could weaken economic and financial stability. He added:
“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 Continues to Double Down on Its Bitcoin Strategy
El Salvador made headlines in 2021 when it became the first country to make Bitcoin legal tender.
The country has since continued its Bitcoin push, with President Nayib Bukele purchasing large amounts of the cryptocurrency.
In mid-November, Bukele even announced that he will begin buying one Bitcoin per day starting from November 18.
As of now, the country is estimated to have around 2,381 BTC, worth around $65 million, acquired at an average price of $43,357.
Bukele’s Bitcoin experiment has been praised in the cryptocurrency world, but criticized by institutions like the International Monetary Fund and the World Bank.
More recently, El Salvador also welcomed Saifedean Ammous, a prominent economist and author of “The Bitcoin Standard,” as an economic advisor to its National Bitcoin Office (ONBTC), an entity that manages all cryptocurrency-related matters in the country.
El Salvador’s National Bitcoin Office was created by President Nayib Bukele in late 2022 in conjunction with known Bitcoiners Stacy Herbert and Max Keiser.
Meanwhile, reports about the adoption of Bitcoin in the small Central American country have been mixed, with indications that it has been slow to take off.
According to government figures, crypto accounts for less than 2% of all of the remittances made to El Salvador.
Remittances, mostly from overseas-based Salvadorans, are a major source of income for the country.
In fact, for this same reason, the government promised that BTC would provide more options and greater convenience for those sending and receiving remittances.
The country even launched a dedicated BTC app, designed in large part to facilitate BTC remittances from overseas. But data from last year showed that only two in 10 people who initially downloaded the app are still using it.