Two United States Senators from opposing political parties have reintroduced legislation to reduce the risks connected with El Salvador’s adoption of Bitcoin as legal cash. The proposed legislation would force government authorities to report on El Salvador’s cybersecurity and financial stability skills and how they contributed to the country’s Bitcoin Law’s approval.
Idaho Senator James Risch presented the measure, titled the Accountability for Cryptocurrency in El Salvador Act, in February 2022. According to Risch, utilizing cryptocurrencies as legal tender could “weaken economic and financial stability while empowering malign actors.” On May 11, he reintroduced the bill with New Jersey Senator Bob Menendez.
Bitcoin has been recognised as legal cash in El Salvador alongside the national colon currency and the US dollar since September 2021. If the law is passed, it might have serious consequences for the country’s Bitcoin Law and financial stability.
In February, the International Monetary Fund cautioned the Central American country to assess the impact of Bitcoin as legal cash on the country’s financial integrity and stability. The last version of the Senate’s Bitcoin-focused legislation was passed via a committee in April 2022. The House of Representatives also introduced a similar bill, although it has not advanced in over a year.
El Salvador’s President Nayib Bukele has been a vocal supporter of Bitcoin, enacting pro-crypto legislation and even proposing to gather funding to build a ‘Bitcoin city’ using BTC-backed bonds. Bukele slammed US senators on Twitter as “boomers” when the bill was introduced in February 2022, alleging they were interfering with “a sovereign and independent nation.”
The bill’s reappearance demonstrates that the argument over using cryptocurrencies as legal cash is far from over. As more nations consider accepting cryptocurrencies, it is critical to thoroughly investigate the possible hazards and benefits of such a move.
Finally, the reintroduction of the Accountability for Cryptocurrency in El Salvador Act emphasizes the ongoing debate over the impact of cryptocurrency adoption on a country’s financial stability and cybersecurity. With Bitcoin becoming legal cash in El Salvador and other nations mulling similar measures, it is critical to understand the risks and benefits of utilizing cryptocurrencies as legal tender. If passed, the bill could have far-reaching consequences for El Salvador and its use of Bitcoin.
