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US Bill Aims to Mitigate Risks from El Salvador’s ‘Bitcoin Law’

A bill has been introduced in the US by three senators and its primary purpose is to mitigate the risks that are associated with adopting Bitcoin, the top cryptocurrency in the market, as ‘legal tender’, as El Salvador has done. Last year, El Salvador had made history when it decided to adopt the pioneer cryptocurrency as ‘legal tender’. Global organizations have criticized the implementation of this law, which include the International Monetary Fund (IMF) and the World Bank as well. The bill that has been put forward is called the ‘Accountability for Cryptocurrency in El Salvador Act (ACES)’.

As the name of the bill indicates, it is aimed at reducing the risks associated with use of bitcoin as legal tender. The three senators stated that the use of Bitcoin only increases the risks of terrorism financing and money laundering. The bill was put forward by Bon Menendez, Jim Risch and Bill Cassidy. Senator Cassidy said that Bitcoin’s adoption as the currency of the country could only lead to money laundering incidents and was not in the interest of the United States. The senators stated that the adoption of Bitcoin as legal tender in El Salvador had given rise to significant concerns about the financial integrity and the economic stability of a vulnerable trading partner of the US in Central America.

If the proposed bill receives approval, then it will take approximately two months for the federal agencies to provide a report on different factors. One of these include the impact of the Bitcoin law on the financial integrity of the country. In addition, it will also assess whether compliance with the Financial Action Task Force (FATF) can be ensured with the use of Bitcoin in the country. Furthermore, El Salvador’s cybersecurity infrastructure is another aspect that will have to be assessed. After all, given the use of crypto in the country, it is necessary to understand the threat of hacks as well.

It also needs to be determined how the underprivileged and unbanked will interact with Bitcoin. Of course, this proposed bill from the three senators has drawn the ire of NayibBukele, the president of El Salvador. Bukele stated in a Twitter post that the three senators did not have any jurisdiction in an independent and sovereign nation. He said that the country was not their front or backyard, or even their colony.

The country’s president has been adamant that they will not change the Bitcoin law, which had been put into effect last year in September. Since then, businesses in El Salvador have been forced to accept bitcoin as a method of payment. As a matter of fact, Bukele has also been making announcements of the country’s acquisition of Bitcoin from time to time. However, the IMF as well as the World Bank has warned El Salvador of the risks associated with adopting bitcoin as legal tender. They have deemed it a risk to financial stability, but crypto supporters are in favor of the Bitcoin Law in El Salvador.

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