“We are not your neighborhood, your backyard or your front yard. Stay out of our internal affairs.” This was tweeted by the president of El Salvador, Nayib Bukele, after US senators presented new legislation that sought to investigate the Bitcoin Law of the Central American country.

Reaction of the President of El Salvador to US interference.

Since the government of El Salvador passed the Bitcoin Law in 2021, legislators around the world, as well as some of the most prominent financial institutions, have expressed strong opposition. The latest proposal from the bipartisan group of senators – Republican Senators Jim Risch and Bill Cassidy with Democratic Senator Bob Menéndez – did not sit well with President Bukele, who lashed out at interference.

He said the US has no jurisdiction over a sovereign and independent nation and asked senators to “stay out of the internal affairs” of country jurisdictions, adding:

Risch believes that El Salvador’s adoption of Bitcoin as legal tender raises significant concerns regarding the economic stability and financial integrity of what he called a “vulnerable trading partner of the US.” in the Central American region.

The Senator said that El Salvador’s new policy has the “potential to weaken” the sanctions policies implemented by the US, which empowers malicious actors such as China and organized criminal organizations. he added,

“Our bipartisan legislation seeks greater clarity on El Salvador policy and requires the administration to mitigate potential risk to the US financial system.”

Cassidy, for his part, noted that El Salvador’s Bitcoin Law will allow cartels to launder money and hinder US interests.

The invoice

If the bill has been enacted into law, federal agencies will have 60 days to present a report to the corresponding congressional committees evaluating various aspects of El Salvador’s technical capacity.

The report will contain the process followed by Salvadoran legislators to develop and enact the Bitcoin Law, the evaluation of its regulatory framework and how it would mitigate the financial integrity and cybersecurity risks associated with virtual currencies, whether or not it complies with the Action Group International Finance (FATF). ) requirements.

Also, the effect on people and businesses and, more generally, the impact of Bitcoin as legal tender on their economy.

The report would also include several more potential consequences for El Salvador’s macroeconomic stability and public finances. These include the unbanked population, the flow of remittances from the US, its relationships with multilateral financial institutions, the bilateral economic and trade relationship with the US, and the potential for reduced use by El Salvador of the USD etc

The next part would also detail El Salvador’s internet infrastructure, assessing “the degree to which cryptocurrency is used” in the country.

Featured image courtesy of Americas Quarterly

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This post Bukele lashes out after US senators introduce legislation investigating El Salvador’s Bitcoin law

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