US Senate Committee Advances Bill to Mitigate Risks From El Salvador Adopting Bitcoin as Legal Tender

The Senate bill to mitigate the risks from El Salvador adopting bitcoin as legal tender has advanced in the U.S. “As El Salvador has adopted bitcoin as legal tender, it’s critical we mitigate risks to our financial system,” said one of the U.S. lawmakers who introduced the bill.

Bill to Mitigate Risks From Bitcoin Being Legal Tender in El Salvador Passes Senate Committee

The U.S Senate Foreign Relations Committee (SFRC) has advanced the ‘‘Accountability for Cryptocurrency in El Salvador Act’’ or ‘‘ACES Act.’’ The bill was introduced on Feb. 16 by Senators Jim Risch (R-Idaho), Bob Menendez (D-N.J.), and Bill Cassidy (R-La.). It aims to mitigate the risks from El Salvador adopting bitcoin as legal tender.

SFRC Ranking Member Senator Risch tweeted Wednesday:

As El Salvador has adopted bitcoin as legal tender, it’s critical we mitigate risks to our financial system.

“The legislation passed by SFRC today requires federal agencies to examine risks, including potential empowerment of bad actors & organized crime,” he said.

The proposed legislation requires a report from the State Department on El Salvador’s adoption of bitcoin as legal tender and a plan to mitigate potential risks to the U.S. financial system. The report would include an analysis of El Salvador’s bitcoin law and the risks for cybersecurity, economic stability, and democratic governance.

El Salvador adopted bitcoin as a national currency alongside the U.S. dollar in September last year. Since then, the country has purchased 1,801 BTC altogether.

Responding to the Senate committee passing the bill, Salvadoran President Nayib Bukele tweeted:

Never in my wildest dreams would I have thought that the US government would be afraid of what we are doing here.

In a follow-up tweet, he wrote: “The U.S. government does not stand for freedom and that is a proven fact. So we will stand for freedom. Game on.”

Senator Bill Cassidy responded to Bukele’s tweet about freedom. He wrote: “Salvadoran residents in the United States don’t like this policy. We are being responsive to their concerns. Perhaps they don’t trust a president who brags about trading bitcoin ‘naked.’”

The U.S. is not the only country concerned about El Salvador’s bitcoin law. In November last year, Bank of England (BOE) Governor Andrew Bailey raised concerns about bitcoin being used as legal tender in El Salvador.

Furthermore, the International Monetary Fund (IMF) has repeatedly urged the country to abandon bitcoin as legal tender. According to the IMF, the costs of making BTC legal tender exceed the potential benefits.

El Salvador, however, does not see a reason to scale back its bitcoin law. In fact, President Bukele has predicted that two more countries will adopt BTC as legal tender this year.

What do you think about the U.S. bill to mitigate the risks of El Salvador adopting bitcoin as legal tender? Let us know in the comments section below.