The US government wants to deal with Bitcoin support in El Salvador. Why?
On September 7, 2021, Bitcoin became legal tender in El Salvador. The country was the first to fully support BTC, and even McDonald’s can now be used to pay in crypto in its territory. Although the idea seems incredibly promising – after all, Bitcoin represents a new generation of fully decentralized money – it is not appreciated by US authorities. And they’ve expressed their dissatisfaction in the form of a bill. We’ll tell you more about what’s going on.
It’s not the first time the U.S. government has mentioned that Bitcoin is recognized as official tender in El Salvador. In particular, back in February 2022, U.S. senators introduced a bill that would require the State Department to report on acceptance of BTC in the country. In addition, it called for the creation of a plan to mitigate potential risks to the U.S. financial system.
As Idaho Republican Jim Risch noted at the time, recognition of crypto as legal tender in El Salvador has raised concerns among US policymakers. They believe that digital assets could weaken the potential for US sanctions because decentralised cryptocurrencies are supposedly suitable for transactions between countries. In addition, they are concerned about El Salvador’s stability because of its active engagement with Bitcoin.
Cryptocurrencies in El Salvador
To recap, the country's authorities not only recognized BTC as a means of payment, but also undertook to invest millions of dollars in this asset.
The situation did not end there. US authorities continue to insist on the risks of Bitcoin in another country’s financial system.
What Bitcoin is being criticised for
This week, the relevant committee passed the aforementioned bill on Cryptocurrency Liability in El Salvador. The next step in the process will be a vote on it by representatives of the Senate. The country’s President Nayib Bukele reacted to the news with the following quote on his Twitter.
Never – even in my wildest dreams – would I have thought that the US government would be afraid of what we are doing here.
At the same time, Bukele posted screenshots of the proposed bill, which contains the politicians’ key inferences.
Screenshot of the new US Bitcoin bill in El Salvador
Nayib further quoted his own tweet and added the following statement.
The US government does not stand for freedom, and this is a proven fact. Therefore, it is up to us to fight for it. Game on! Bitcoin is “fuck off money”.
In the original Nayib Bukele used the phrase "fuck you money". Apparently he was alluding to the inability of the US authorities to control Bitcoin. Well, the use of such an asset is a sign of commitment to the ideals of freedom that the president of El Salvador was talking about.
Senator Jim Risch also commented on what was happening. Here is his rejoinder, as cited by Decrypt.
As El Salvador has recognized Bitcoin as legal tender within its borders, it is critical for us to recognize and mitigate the potential risks to the US financial system.
Accordingly, U.S. authorities explain their interest in what is happening in El Salvador by the possible danger to their own financial system. Most likely, they are talking about the possibility of circumventing sanctions with digital assets. In the past, FBI chief Christopher Wray has said that the prospects for such use of cryptocurrencies are rather small.
President of El Salvador Nayib Buquele
By the way, Nayib Buquele strongly reacted to the initiative of the U.S. authorities immediately after the publication of the bill. At the time he said that they have no jurisdiction “in a sovereign and independent country”, with El Salvador not being a “colony or backyard” of America.
Note that Buquelet now continues to lead the country towards mass use of cryptocurrencies. To this end, he has reached out to representatives of the Binance exchange, among others. Founder and head of the platform Changpen Zhao responded to the request, visited El Salvador and held a meeting with Nayib. Here’s a related snapshot.
Meeting between Binance founder Changpen Zhao and El Salvador president Nayib Bukele
As Changpen noted, there was plenty of “discussion about the promotion of cryptocurrencies” at the meeting.
We believe that the main concern of the U.S. government is precisely the equal use of BTC against the dollar in El Salvador, rather than the possible circumvention of sanctions. Still, many US experts have previously made it clear that using crypto to circumvent restrictions on a large scale is virtually impossible, as it is closely tied to banks. In any case, the further essence of the initiative will be clear later, and the authorities will probably vote for it. So we wait for the situation to develop.
Share your opinion on the situation in our millionaires’ cryptochat. We will talk about other blockchain-related topics there as well.
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