US lawmakers address El Salvador's crypto adoption risks with re-introduced bill

The measure can be seen as a revised attempt at the Accountability for Cryptocurrency in El Salvador Act, first introduced post the enactment of the nation's Bitcoin Law

  • Published:
  • 15/05/2023 05:01 PM

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Two US lawmakers belonging to opposite political sides have reintroduced the 2022 legislation that aims to alleviate the perceived risks associated with El Salvador adopting Bitcoin as a legal tender.

On the 11th of May, the Idaho Senator James Risch and the New Jersey Senator Bob Menendez introduced “A bill which requires reports on the adoption of cryptocurrency as legal tender in El Salvador”.

Within months after El Salvador’s Bitcoin Law came into effect, Risch introduced the Accountability for Cryptocurrency in El Salvador Act in February 2022. The new bill seems to be a second attempt at this in order to fight the use of crypto as legal tender. 

A Washington Examiner report of 12th May claims that using crypto as legal tender would “weaken economic and financial stability and empower malign actors.” El Salvador adopted Bitcoin as legal tender along with USD from September 2021.

US federal agencies can report on the financial stability and cybersecurity of El Salvador if this bill is passed. Even the IMF warned El Salvador to take into account the risks involved in using Bitcoin as a legal tender and what impact can the same have on the financial stability of the nation.

In April 2022, a committee had passed the previous version of this legislation that was introduced in the US Senate. Even a companion bill was introduced by the legislators of The House of Representatives. However, that did not move for more than a year as per the Congress records.

US lawmakers were directly targeted by Nayib Bukele, the President of El Salvador on Twitter as “boomers” when they introduced the bill. He claimed that the US lawmakers tried to interfere with “A sovereign and independent nation.” El Salvador has adopted various pro-crypto policies under Bukele’s lead.

These policies also include fundraising plans to build a Bitcoin city with the help of bonds backed by Bitcoin.

Notably, El Salvador was the very first country to introduce Bitcoin as legal tender. The nation’s pro-crypto policies have encouraged institutional adoption of crypto across the world, and many countries have taken steps to regulate the use of digital currencies in their respective markets. 

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash