El Salvador’s decision to adopt Bitcoin as legal tender has been met with both excitement and skepticism, causing American lawmakers to call for a risk report on the potential impact on economic relations and law enforcement cooperation between the two nations. Recently, US Senators Jim Risch and Bob Menendez reintroduced a bipartisan bill called the Accountability for Cryptocurrency in El Salvador (ACES) Act, aiming for a State Department report on the matter.
The senators are requesting an in-depth analysis of El Salvador’s Bitcoin adoption, its potential risks for cybersecurity, economic stability, and democratic governance in the Central American country. In a Foreign Relations Committee blog post, Risch expressed his worry about the possible consequences of this move, suggesting that it could undermine financial stability. He further stressed that gaining clarity on this issue is essential for supporting prosperity and transparency in Central America.
Despite these concerns, El Salvador continues to forge ahead with its Bitcoin strategy. The nation made history in 2021 when it became the first country to recognize the cryptocurrency as legal tender. Since then, the Salvadoran government, led by President Nayib Bukele, has been actively investing in and promoting Bitcoin. The country is now estimated to have acquired around 2,381 BTC, worth approximately $65 million, at an average purchase price of $43,357. Bukele’s initiative has garnered support within the cryptocurrency community but faced criticism from organizations such as the International Monetary Fund and the World Bank.
In a recent development, El Salvador welcomed Saifedean Ammous, a renowned economist and author of “The Bitcoin Standard,” as an economic advisor to its National Bitcoin Office (ONBTC). ONBTC, which oversees all cryptocurrency-related matters in the country, was established by President Bukele in partnership with Bitcoin proponents Stacy Herbert and Max Keiser.
However, the actual adoption of Bitcoin within the small Central American country has seen mixed results. Even though the government initially designed a dedicated app to facilitate overseas BTC remittances, only two in ten people who have downloaded it are reportedly still using it. As of now, crypto accounts for less than 2% of El Salvador’s total remittances, indicating that the country’s Bitcoin experiment has not quite taken off as expected.
In conclusion, the fervor surrounding El Salvador’s foray into the world of cryptocurrency has been received with mixed emotions, particularly by influential lawmakers in the United States. As the nation moves ahead with its ambitious Bitcoin strategy, it remains to be seen how this groundbreaking decision will impact various facets of cybersecurity, economic stability, and democratic governance both within El Salvador and across the global stage.
Source: Cryptonews
