The Rise of Bitcoin in El Salvador Portends a New US Foreign Policy Toolkit (Op-Ed)

US Rep. Norma Torres (D–CA) introduced Monday the Senate Accountability for Cryptocurrency in El Salvador Act. The bill was co-sponsored by Rick Crawford (R. AR).

Rep Torres averred:

“El Salvador’s adoption Bitcoin is not an intentional embrace of innovation but a reckless gamble that is destabilizing this country.”

The bill directs the State Department, heads of other US federal agencies and departments to examine the adoption of Bitcoin in the Pacific Central American nation. They will report back to Congress within 60 Days of the passage.

Credible Concerns

ACES is seeking recommendations to improve cyber security and protect US interests abroad. This includes the US Dollar’s status as a reserve currency.

After a string of grisly gangland murders that claimed 70 victims, Nayib Bukel took drastic measures to combat crime. The bill reached the US House as the president prepared to fly to Miami for Bitcoin 2022 Conference.

ACES passed a Senate Committee in February and could now be brought up for a full vote in Senate. The bill was cleared by the Senate Committee in February. El Salvador’s president Nayib Bukele, as usual, denounced the bill as US interference in El Salvador. He claimed that the US government was “afraid” his country would adopt bitcoin as legal currency, and warned the US not to interfere in El Salvador.

However, the US federal government sees Bukele’s decision to adopt Bitcoin as a reasonable concern.

In Feb, US Sen Jim Risch (R-ID) said:

“This new policy could weaken U.S. sanction policy, empowering malign players like China and organized crime organizations. Bipartisan legislation provides more clarity about El Salvador’s policy, and requires that the administration mitigate any risk to the U.S. banking system.

Sen. Bill Cassidy (R.-LA) was added:

“El Salvador’s recognition of Bitcoin as an official currency opens up the possibility for money laundering cartels, and weakens U.S. interests.” We must address this problem head-on if the United States wants to fight money laundering and keep the dollar as the reserve currency of the globe.

If it is thorough, the State Dept report requested by the bill might include that Bitcoin. Because of its transparency (all transactions and accounts on Bitcoin’s Blockchain are public), it would make it easier for US security agencies and police agencies to track and counter illicit activity.

Bitcoin vs. Traditional Banking

Although Congress may have legitimate concerns, many US legislators are still far behind the curve when it comes to understanding Bitcoin and the cryptocurrency market. As a reference, please refer to Science.org’s 2016 article “Why criminals cannot hide behind Bitcoin” and Inc.’s 2018 Article “Startups Helping FBI Catch Bitcoin Criminals”.

It’s actually Federal Reserve corporate banks who have the poor track record of allowing terrorists and criminals to launder money in their corporate vaults for USD.

A number of violations involving institutional finance have been made public. These violations only seem to lead to fines, and not technical policy reforms that would close the gap to terrorists or criminals.

Wells Fargo, for instance, allowed the Mexican drug cartels to launder $378 million through its bank in 2010. (The Guardian)

After learning that HSBC had laundered hundreds and millions of dollars for terrorists and the drug cartel, the US penalized HSBC with a $1.9 billion fine. (New York Times).

JP Morgan, America’s largest institution banking giant, was fined $5.3 billion by the US Treasury for violating sanctions against Iran and Cuba 87 times in 2018. (Daily Sabah)

If bitcoin and peer to peer finance continue to rise in prominence around the world, it will be difficult for the US to enforce its sanctions policy. They have not been an effective tool of foreign policy.

They look more like electioneering tools, which fail to achieve foreign policy goals while giving legislators in their home districts the appearance of taking action on overseas issues their voters read about in the news.

“U.S. “U.S.

The US State Department and lawmakers will need to adopt a new paradigm that rewards positive actions to influence foreign powers (carrots rather than sticks). If the capital of established US corporations is highly valued in developing countries, the US will be able to attach conditions to its foreign aid and direct investment.

The Federal Reserve can’t block Bitcoin. If that happens, the US should join the hash power race for global monetary influence.

The decline in USD as the reserve currency of the world is causing concern for the government. Because of its stability and liquidity, the US government will ensure that the dollar is always in demand worldwide for this purpose.

The damage to US foreign currency influence that crypto causes can be mitigated by considering the critical global financial importance of Bitcoin’s hash power race – a new critical arms race for the 21st Century.

The US government will have to keep more bitcoin in reserve and will need to be more willing to use hash power to deploy the network. This will make them more secure in the new global financial order, where cryptocurrency will continue to gain in importance.

The world will rush headlong into a new financial order. The US government must adapt its foreign and monetary policy tools to meet the challenge. The time is running out.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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