Two members of Congress introduced the Accountability for Cryptocurrency in El Salvador (ACES) Act to reduce potential risks to the United States that could arise from El Salvador adopting bitcoin as legal tender.
Rep. Norma J. Torres, D-Calif., chair of the Central America Caucus, and Rep. Rick Crawford, R-Ark., senior member of the House Subcommittee on Intelligence Subcommittee on counterterrorism, counterintelligence and counterproliferation, want to explore potential risks and develop a plan to protect the country.
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“Global financial institutions have studied and detailed the many risks of Bitcoin adoption by El Salvador, and the international community recognizes the potential danger,” Torres said in a press release.
“El Salvador is an independent democracy and we respect its right to self-governance, but the United States must have a plan in place to protect our financial systems from the risks of this decision, which appears to be a reckless gamble rather than a decision. thoughtful embrace of innovation,” said Torres.
The bill directs the State Department to conduct an analysis of El Salvador’s adoption of bitcoin and outline the risks to cybersecurity, economic stability, and democratic governance in El Salvador. The bill also calls for a plan to reduce risk to the US financial system.
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“The rise in popularity of cryptocurrencies such as Bitcoin creates questions and necessary regulatory and consumer protection scrutiny that the US federal government should be involved in,” Crawford said.
“El Salvador’s hasty decision to adopt Bitcoin as legal tender raises concerns about the stability of US-El Salvador economic relations. It is our job as policymakers to better understand the potential effects of the adoption bitcoin as legal tender in El Salvador and what the United States can learn in the future,” he added.
The International Monetary Fund (IMF) cited El Salvador’s decision to use bitcoin as legal tender as presenting inherent risks to financial stability and consumer protection. This is the main reason why the IMF decided not to lend money to the country.
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El Salvador may have lost around $22 million in just one recent cryptocurrency market decline, according to Moody’s Sovereign Risk Group.
The Torres and Crawford bill was introduced as complementary legislation to a Senate bill introduced last month by U.S. Senators Jim Risch, R-Idaho, Bob Menendez, DN.J., and Bill Cassidy, R. -The.