A group of members of the Senate Foreign Relations Committee has put for consideration a bill on cryptocurrency responsibility in El Salvador. It envisions the preparation of \”a plan to mitigate potential risks to the U.S. financial system\”.
The bill was authored by Jim Risch, Bob Menendez and Bill Cassidy.
If enacted, the State Department, in coordination with other agencies, would prepare a corresponding report. No later than 90 days, it would present a package of measures. The document also mentions \”other countries that use the U.S. dollar as legal tender\”.
Lawmakers are interested in the process of approving Bitcoin as the official currency in El Salvador, its impact on citizens and businesses, including its degree of use, and the authorities’ ability to counter cybersecurity risks.
Additionally, the report should reflect data on the share of the unbanked population and the volume of remittances to the country from the United States.
The State Department will be tasked with characterising the bilateral economic and commercial links and the possibility of reducing El Salvador’s use of the U.S. dollar. Senators also requested data on the country’s engagement with the IMF and the World Bank.
“This move could potentially weaken U.S. sanctions policy, expanding the reach of malign actors such as China and organized crime”, — commented Risch.
President Nayib Bukele responded to the initiative.
“OK boomers… You have zero jurisdiction over a sovereign and independent nation. We are not your colony, not your back yard or your front yard. Stay out of our internal affairs. Don’t try to control something you can’t control”, — explained he.
OK boomers…
You have 0 jurisdiction on a sovereign and independent nation.
We are not your colony, your back yard or your front yard.
Stay out of our internal affairs.
Don’t try to control something you can’t control 😉
https://t.co/pkejw6dtYn— Nayib Bukele 🇸🇻 (@nayibbukele) February 16, 2022
El Salvador adopted a bill recognizing Bitcoin as legal tender on 9 June 2021.
By February 2022, the Chivo digital wallet was used by 4 million Salvadorans, including 70% of the population who did not have bank accounts.
By 15–20 March, the authorities will prepare the issue of Bitcoin bonds worth $1 billion.
Earlier, the IMF expressed concerns about the risks associated with El Salvador’s Bitcoin bonds. The organisation has repeatedly urged the country to abandon the cryptocurrency as a means of payment.
On February 9, Fitch downgraded El Salvador’s long-term rating from \”B-\” to \”CCC\”. In justification, analysts cited the growing reliance on short-term financing in light of the upcoming January 2023 maturity of an $800 million bond issue, as well as difficulties in extending cooperation with the IMF in 2022-2023.
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