US Senate Bill On Bitcoin As Legal Tender In El Salvador
Last month when I wrote about the news El Salvador's Bitcoin Adoption May Pose Risks to US Financial System in my post titled - Can't They Just Leave El Salvador Alone? I thought it was joke and it wouldn't become anything serious. Today, it looks like the actual bill has be prepared and cleared the committee stage and will be heading to Senate floor for the vote. If you would like to read the text of the bill, you can do so here. It is really disappointing to see lawmakers spending their time to undermine the genuine efforts of a foreign country to improve its economy and lifestyle of its people.
The bill was written by US Senators Jim Risch, Bob Menendez, and Bill Cassidy and was titled Accountability for Cryptocurrency in El Salvador Act when it was first introduced in February. The purpose of the bill is to require government agencies and the State Department to collect reports on the adoption of bitcoin as a legal tender in El Salvador, and develop plans to mitigate potential risks to the US Financial System. It sounded strange when it was introduced last month, and it still does. Why would US financial system be threatened by a country like El Salvador?
The president of El Salvador had the same question in his mind when he became aware of this and tweeted the following:
Never in my wildest dreams would I have thought that US Government would be afraid of what we are doing here.
Seriously! There is no comparison of the size of economy, financial transactions, and global influence between the US and El Salvador. El Salvador has been doing what they deem is necessary for their economy and financial system. First, it should be no other country's business what they are doing. Second, what is the point?
I can see how bitcoin may be a risk to USD and US financial system if all of the sudden bitcoin gained massive adoption globally and more and more countries adopted bitcoin as legal tender. Even then the risk assessment should be done against bitcoin, not the country that is trying to utilize it.
In my opinion the bill itself is not written in good faith and is contradictory. On the one hand it is ordering US agencies to do some research and study how things are going with bitcoin adoption in El Salvador, and on the other hand it is also ordering to come up with solutions to mitigate the risks these actions pose to the US financial system. If they want some research done, and reports created so that they can have a better information to make more educated decisions in what actions to take, that would be ok. In fact, that would be great. All of us can benefit from well done research and reports. The problem is the already make the conclusion that El Salvador's actions are a threat to the US financial system, in the same bill. That is contradictory, in my opinion.
Better approach would be, to actually have a genuine interest on the topic of bitcoin or other cryptocurrencies being adopted as legal tender. Until El Salvador started adopting bitcoin as legal tender, this concept was only theoretical. We could discuss about it, its benefits and consequences. But now we have this being done in practice. And nobody really knows what the outcome will be. It can fail and or it cane become a huge success. In either case it wouldn't destroy US financial system. That's why this presents a great opportunity for academia, politicians, lawmakers, and financial experts not only in the US but around the world to watch closely and study the progress in El Salvador. Perhaps, even offer help if needed. Why not? Shouldn't we all be rooting for success of one another in the international arena, when it comes to eliminating poverty, improving lifestyles, establishing business relationships, etc?
It is clear the bill is not El Salvador or crypto friendly. It is not a law, yet. It would still have to go through the senate vote. If passed will go to the House of Representatives for them to vote. And even after that president Biden will have to sign it. If it actually did become a law, it would only prove one thing. That is US lawmakers are really bored and don't have anything else to do. About a week ago when Senate passed a legislation that would make daylight saving time permanent starting in 2023, it seemed like they finally were starting to work on thing that matter. Well, it didn't take long for them to get bored again. Joke.
I also do not like the public officials use words cryptocurrency and bitcoin interchangeably. Every crypto asset have its unique characteristics. When one can be of great use on certain situations, another may not work as well. Cryptocurrency refers to so many crypto projects and assets. There is only one Bitcoin. It is easier to define what bitcoin is and judge it on its own merits, rather than using generalized concepts. It is also clear that El Salvador has adopted only bitcoin as legal tender and no other crypto assets. Since this bill is specifically targeting El Salvador and its bitcoin endeavors, it would be more accurate to only require the reports on bitcoin. When they start using bitcoin and cryptocurrency interchangeably, it makes it easy for them to attribute anything negative they may have seen in any other crypto assets.
While El Salvador made bitcoin a legal tender, it also kept US dollars as legal tender as well. They didn't replace US dollars with bitcoin. They made it possible for people and businesses to use both. I think this should be celebrated by US lawmakers. The fact, El Salvador decided to explore bitcoin use when they already had USD as legal tender, is what should have raised concerns. And perhaps, research and reports they should have sought had to be why would a foreign country that uses USD as legal tender seek alternative options? If they ask questions like this, they may get a better understanding that will help in making meaningful laws that can better USD as a currency.
Usually in the business world, when a responsible company see its loyal customers trying alternative products, such companies would try to figure out the reasons and work on improving their product so that they can win back these loyal customers.
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I think what El Salvador is trying to do could trigger other countries in the world. The more cryptocurrencies grow stronger the more dangerous they become against the existence of the US dollar. This is their fear.
I totally agree with your thoughts here. Rather than pushing BTC down, their focus should be to stabilize their currency in a way that its not hampered by the legalization of Crypto currency anywhere in the world. If a country like USA, whose currency is the strongest in the world, is pushing such steps away to keep its economy intact, I wonder what's gonna happen to the rest of the world.
This would make perfect sense. But politicians tend to act against logic.
I just hope this doesn't lead up to the US having to Invade El Salvador under the pretense of 'Protecting Democracy'.
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I think is a good Idea from El Salvador because the more the stronger of crypto currency introduction the less the user of the dollar.
The dollar never disappeared from El Salvador but I feel that the politicians believe crypto is a threat to their control. With everything going on, I can only see the current financial systems losing trust and most currencies depend on trust to maintain their value.
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Yes, trust system have been exposed. Time to try trustless ones.
the blockchain is an incredible idea, the greatest invention of the last 10,000 years, otherwise everyone will notice sooner or later, even governors, states and banks. very nice consideration you made at the end of the post
There eis indeed so much wisdom in holding the usd and btc as legal tender in El Salvador. It empowers the people to create wealth a lot and also allows for a thriving crypto space. Such ingenuity is what is lacking in the US seats. I mean if they really still interchange bitcoin for crypto, that's an error, that's like calling every car a Jeep because a Jeep is more common. Just like cars are different, cryptos are as well.
I also think the US may be poking too much of themselves into people's affairs and I hope the El Salvadorians wont be deterred by these.
Yes, more options for people to use better.
It only shows that these officials are probably ignorant about cryptocurrency.
Also, I have found out that whenever politicians begin to do something that is completely senseless, it is because there is an ulterior motive that they are hiding, with the senseless act as a front for their goal.
They are not dull, and they as sure as hell are not bored. There's something else they don't want us to see...
I think the US are actually pained that they didn’t get to adopt BTC or any other form of crypto first as a legal tender, so instead of support or leave a country who has done so in this case El Salvador 🇸🇻, they just interfering and highlighting risks where there is none.
They are just bullies
Spot on! Outright bullies!!
What's going on. These politician's always poke their nose in everything but nothing. This is actually beneficial for everyone involved. So cumon give the people a break !
This reminds me of the Libya/Gadaffi situation. 2009 Gaddaffi announces a movement to put African states onto a new currency based on gold and oil resources produced within Africa in order to remove their reliance on USD. He also suggest that profits from oil resources should go directly to the people in the country rather than the government to be distributed, because corruption within the government meant that the money would never make it to the people. Within 2 years, in 2011, a revolt by the people breaks out, backed by the UN. Gaddafi gets overthrown and killed and the country descends into chaos and mixed factions with no leadership and ongoing civil war.
I'm not an expert on the subject and there are mixed views of course and varying perspectives of the situation. But it all seems very coincidental that anytime a leader talks about changing the status quo, in any way, especially financially, they typically end up being overthrown fairly quickly.
I would not be surprised at all if in the next few years the same sort of thing happens in El Salvador. Hopefully not but we will see.
I remember that story how he wanted to create gold coins standard in Africa. Especially, when USD is kind of standard for oil trades, I wouldn't be surprised if we see something revealed in the future when some classified documents get declassified. I don't think El Salvador is an oil rich country. So, they probably be ok. Once couple more countries start adopting bitcoin, maybe their focus will shift and realize there isn't much they can do about bitcoin.
This is so bad , I don't know why all this politicians involved in the matter that doesn't concerning them.
Instead of supporting countries that try to adopt cryptocurrencies such as El Salvador, the United States of America resorts to displaying false fears as this harms its interest and its economy.
Politicians politic-ing. Some things never change... :P
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Yes, and meddling in other country's business.
first of, the fact that the bill would also enable the U.S. monitor remittances from El Salvador irks and infuriates me . Honestly, I really never in my wildest dreams would have thought that the US Government would be afraid of what the Nayib Bukele’s led El-Salvadoran government is doing as regards cryptocurrency adoption and absorption. As you referred to one of your previous articles , can’t the US just leave El-Salvador alone?
I'm sure these laws were written by bankers in the lobbyist groups and handed over to the politicians in their pockets to put out there. I highly doubt any of these "lawmakers" decided to come up with this bill on their own.
Just another example of how big corporations "buy" influence and use it for self-serving purposes. Why spend all that money to research these things when they can have the taxpayers pay for it? Disgusting.
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That is a really good point. Bankers and lobbyists do have huge influence over politicians.
Sadly it's nothing new that the US government and agencies are intervening in the internal affairs of other smaller sovereign countries, and bullying them until they give in – especially when it comes to what it consider its sphere of influence. In this sense El Salvador for the US is not much different from Ukraine to the Russians, and they're not going to let them get "out of line" – be it too left leaning governments or challanges to the USD world reserve currency, like adopting BTC.
I would suggest checking out The Jakarta Method for a bit of an insight into how the US methodically have operated. Even though it started in Indonesia in 1965, it created the foundation for a strategy spanning over the last 60 years (almost), and probably still dictates how Latin American "issues" are to be handled.
They do like to maintain their influences. US foreign policy doesn't have a good reputation. Too many lies, deceptions, and breaking promises. I will take a look at the Jakarta Method when I get a chance. Most frustrating part is, these senators don't have anything better to offer.
Yes, the incompetance of US officials is also a good observation when it comes to where the US Empire is in its life cycle. Corruption breed incompetence (which breed more corruption) when it comes to officials, and is symptomatic of a degenerating state.
Even if the US government didn't use any less diablolical methods during the 60s and 70s, they still did pride themselves in having the most competent people in important positions. It seems to me like this has degenerated over time, and increasingly become more about how much you're able to pay for a position. You certainly don't need to think Kissinger is a nice person, but it's hard to argue that he was an incompetent diplomat.
What The?? :P What a waste of time and it's being so nosy and meddlesome! I think these senators are just creating some busy work for themselves so it looks like they are doin g something. :P
They will never ask, because they know the answer. They know they will loose the power, if another better currency takes their place. Most of the countries fear this only because they want to retain their Sovereign power - who can take decision about their currency.
If they actually know the answers and still act like this, that's kinda evilish move.
Around here we would say: "They are using a missile to kill a midge" It really is something inexplicable or something that has hidden intentions.
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Hah! US lawmakers? The ones who seized people's gold in 1934 and the ones who are eager to seize people's Bitcoin today? These guys only job is to protect the banking sector and the elite.
If El Salvador succeeds massively it might serve as an example for other countries, which would, potentially, hurt the US dollar. They will not let that happen.
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They did seize gold and probably will try to take bitcoins too. I hope not. But I can see this happen too.
Yup, it'll be gradual though. They'll institutionalize Bitcoin, then let the banks take custody of btc, then there'll be an excuse as to protected the people.
I am pleased with another triumph of bitcoin, which, as I believe, gives the world a chance to become more fair.
Having US introducing Bitcoin is a great strategy to try to edge the crypto-market that will be developing into Russia. I think that they found themselves almost forced in doing so. But that's a great news for all the crypto lovers.
Besides, how ended up the Poker tournament from yesterday? :D