A group of US senators introduced legislation Tuesday centered around El Salvador's adoption of bitcoin as legal tender.
TheAccountability for Cryptocurrency in El Salvador (ACES) Act was introduced by Senate Foreign Relations Committee ranking member Jim Risch (R-Idaho) and committee chairman Bob Menendez (D-N.J.), as well as Bill Cassidy (R-La.).
The bill, if passed, would mandate the production of a State Department report on El Salvador's bitcoin moves, as well as a "plan to mitigate potential risks to the U.S. financial system."
The bill states:
"Not later than 90 days after the submittal of the report required by subsection 19 (a), the Secretary of State, in coordination with the heads of other relevant Federal departments and agencies, shall submit to the appropriate committees of Congress a plan to mitigate any potential risk to the United States financial system posed by the adoption of a cryptocurrency as legal tender in El Salvador; and any other country that uses the United 2 States dollar as legal tender."
The State Department report would include several key pieces of information about El Salvador’s process to legally make bitcoin legal tender, as well as an examination of how that law affects its citizens and businesses. For example, the report would describe the process El Salvador followed to develop and enact its bitcoin law, the extent to which its citizens are using cryptocurrency, and the country’s technical ability to handle cybersecurity risks. It would also include contextual information, such as data on El Salvador's unbanked population and remittance flows from the U.S.
The report would also investigate matters such as “El Salvador’s bilateral economic and commercial relationship with the United States and the potential for reduced use by El Salvador of the United States dollar,” its relationships with organizations like the International Monetary Fund (IMF) and World Bank and any possibility of using cryptocurrency to circumvent U.S. sanctions.
“El Salvador’s adoption of Bitcoin as legal tender raises significant concerns about the economic stability and financial integrity of a vulnerable U.S. trading partner in Central America,” Risch said in a press statement. “This new policy has the potential to weaken U.S. sanctions policy, empowering malign actors like China and organized criminal organizations. Our bipartisan legislation seeks greater clarity on El Salvador’s policy and requires the administration to mitigate potential risk to the U.S. financial system.”
El Salvador’s president, Nayib Bukele, responded to the news with an English-language tweet.
OK boomers…— Nayib Bukele 🇸🇻 (@nayibbukele) February 16, 2022
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 😉
El Salvador declared bitcoin legal tender on September 7, 2021, alongside the U.S. dollar, following the passage of a law in the country's national legislature earlier in the year.
The full text of the legislation can be found below: