El Salvador’s BTC Adoption Concerns US Legislators

American legislators have raised concern over El Salvador’s adoption of Bitcoin as legal tender and have requested a risk assessment of the potential impact on bilateral economic relations and law enforcement cooperation.

Senators Jim Risch and Bob Menendez reintroduced a measure requesting a State Department report on Bitcoin adoption in El Salvador last month.

The Accountability for Cryptocurrency in El Salvador (ACES) Act was introduced in February last year.

Legislators in the United States require an analysis of El Salvador’s implementation of Bitcoin and the associated risks to cybersecurity, economic stability, and democratic governance.

In a blog post for the Foreign Relations Committee, Risch expressed concern about the ramifications of El Salvador’s adoption of Bitcoin as legal tender, alleging that it could threaten economic and financial stability.

El Salvador will make headlines in 2021 as the first country to legalize Bitcoin as legal tender, 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.”

President Nayib Bukele has since continued the country’s Bitcoin push by purchasing significant quantities of cryptocurrency.

In mid-November, Bukele announced that beginning November 18, he would purchase one bitcoin per day.

Currently, it is estimated that the country has approximately 2,381 BTC, worth roughly $65 million, acquired at an average price of $43,357.

The Bitcoin experiment of Bukele has received praise in the cryptocurrency community but has been criticized by institutions such as the International Monetary Fund and the World Bank.

Recently, El Salvador appointed Saifedean Ammous, a renowned economist and author of “The Bitcoin Standard,” as an economic advisor to its National Bitcoin Office (ONBTC), which administers all cryptocurrency-related matters within the country.

Late in 2022, El Salvador’s National Bitcoin Office was established by President Nayib Bukele in collaboration with well-known Bitcoin enthusiasts Stacy Herbert and Max Keiser.

In the meantime, there have been conflicting reports about the adoption of Bitcoin in the small Central American nation, with indications that it has taken off slowly.

According to government data, less than 2% of all remittances to El Salvador are made using cryptocurrency.

Remittances, primarily from Salvadorans living abroad, are a significant source of income for the country.

The government promised that BTC would offer more options and greater convenience for those sending and receiving remittances for the same reason.

The country has even released a dedicated BTC app, which is intended to facilitate BTC transfers from abroad.

However, according to data from the previous year, only two out of ten individuals who downloaded the app are still using it.