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Two US Senators, James Risch of Idaho and Bob Menendez of New Jersey, hailing from different political affiliations, have once again proposed a 2022 legislation. The bill is designed to address the perceived risks associated with El Salvador’s decision to recognize Bitcoin as legal tender.
According to congressional records, the senators reintroduced “a bill to require reports on the adoption of cryptocurrency as legal tender in El Salvador” on May 11. This legislation seems to be a redux of the Accountability for Cryptocurrency in El Salvador Act, which was first introduced by Senator Risch in February 2022, not long after El Salvador enacted its Bitcoin Law.
A Washington Examiner report from May 12 indicated that Senator Risch proposed the bill as a part of an effort to combat the use of cryptocurrency as legal tender, arguing that it could “undermine economic and financial stability and facilitate nefarious actors.” Since September 2021, Bitcoin (BTC) has been a legal tender in El Salvador, alongside the national colon currency and the US dollar.
Should this bill be passed, it could mandate US federal agencies to scrutinize and report on El Salvador’s cybersecurity and financial stability capabilities. These considerations may have influenced the Central American nation’s decision to enact the Bitcoin Law. The International Monetary Fund (IMF) also cautioned El Salvador in February about the potential risk to the country’s financial integrity and stability posed by Bitcoin’s status as legal tender.
The prior iteration of this Bitcoin-focused legislation, introduced in the Senate, passed committee review in April 2022. Concurrently, a companion bill was presented in the House of Representatives. However, according to congressional records, this legislation has not advanced in over a year.
El Salvador’s President Nayib Bukele previously criticized US lawmakers as “boomers” on Twitter when the bill was first introduced. He accused them of meddling in “a sovereign and independent nation.” Under Bukele’s leadership, El Salvador has embraced several pro-crypto policies, including plans to finance the construction of a ‘Bitcoin city‘ using BTC-backed bonds.