Initiative presented in the US to mitigate risks for bitcoin in El Salvador

Three US senators presented this Wednesday a legislative initiative for the Government to design a plan that “mitigates the risks” that the adoption of bitcoin in El Salvador has for the US financial system.

The text, called the Law for the Responsibility of Cryptocurrencies in El Salvador, is promoted by Democratic Senator Bob Menéndez, president of the Foreign Committee of the Upper House; and Republicans Jim Risch (the highest-ranking conservative on that committee) and Bill Cassidy.

The bill urges the US Department of State to analyze “the risks to cyber security, economic stability, and democracy” that bitcoin has for El Salvador and design “a plan to mitigate the risks to the system American financier.

In a statement, Risch stated that the adoption of cryptocurrency affects “the economic and financial stability” of the Central American country, and “may weaken the US sanctions policy, empowering China and organized crime.”

Meanwhile, Cassidy denounced that bitcoin “opens the door to money laundering cartels and undermines American interests,” for which he called for “addressing this problem head-on.”

El Salvador became in September 2021 the first country in the world to adopt the crypto active as legal tender, along with the US dollar.

The International Monetary Fund (IMF) urged the country, governed by Nayib Bukele, to “eliminate the quality of legal tender” from bitcoin and expressed its “concern” about the issuance of cryptocurrency-backed bonds.

The risk measurement agency Fitch Ratings lowered El Salvador’s long-term credit rating and among the reasons it cited the “uncertainty” of reaching an agreement with the IMF after the adoption of bitcoin.

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