- The bill was introduced in the US House of Representatives just as President Nayib Bukele was preparing to fly to Miami for the Bitcoin 2022 Conference after a rash of grisly gangland murders claimed the lives of 70 people.
- A number of well-publicized infractions of institutional finance have resulted in fines rather than technically viable policy adjustments that narrow the loopholes to terrorists and criminals. Wells Fargo, for instance, permitted the Mexican drug cartel to launder $378 billion via their bank in 2010.
- If the Federal Reserve System fails to halt Bitcoin, the United States should consider joining the hash power race in order to maintain its worldwide monetary power.
The Senate Accountability for Cryptocurrency in El Salvador Act (ACES) was presented by US Rep. Norma Torres (D-CA) on Monday. Rep. Rick Crawford (R-AR) is one of the bill’s co-sponsors. Rep. Torres stated El Salvador’s introduction of Bitcoin is a hasty bet that is undermining the country, not a careful embrace of innovation. The law directs the State Department and other heads of US federal departments and agencies to investigate bitcoin adoption in the Pacific Central American country and report back to Congress within 60 days of its passage.
Issues That Are Valid
ACES is looking for cyber and national security proposals, as well as ways to defend US interests abroad, particularly the dollar’s reserve currency status. The bill was introduced in the US House of Representatives just as President Nayib Bukele was preparing to fly to Miami for the Bitcoin 2022 Conference after a rash of grisly gangland murders claimed the lives of 70 people.
ACES passed through a Senate committee in February and might be brought up for a full Senate vote. El Salvador’s president, Nayib Bukele, denounced the bill as US intervention in El Salvador after it passed that hurdle. He claimed that the US administration is afraid of El Salvador’s adoption of bitcoin as a legal tender and advised the US to stay away from the country. However, the US federal government’s fears over Bukele’s desire to adopt bitcoin are understandable.
Senator Jim Risch (R-ID) of the United States said in February: This new doctrine has the potential to erode US sanctions policy, giving hostile actors such as China and organized criminal organizations more power. Our bipartisan bill wants more clarification on El Salvador’s policies and asks the administration to reduce any potential risk to the financial system in the United States. Senator Bill Cassidy (R-LA) went on to say:
Recognizing Bitcoin as an official currency in El Salvador, it opens the door to money laundering cartels and jeopardizes US interests. If the United States wants to prevent money laundering and keep the dollar’s role as the world’s reserve currency, it must address this issue head-on.
If the state department analysis requested by the bill is thorough, it may find that bitcoin’s transparency (all accounts and transactions on bitcoin’s blockchain are publicly visible) makes it easier for us national security and law enforcement authorities to monitor and counteract criminal activities.
While Congress has legitimate concerns, most US legislators appear to be way behind the times when it comes to bitcoin and the cryptocurrency business. see science.org’s 2016 article why criminals can’t hide behind bitcoin and inc.’s 2018 article startups helping the FBI catch bitcoin criminals as a starting point.
In fact, it is Federal Reserve corporate banks that have a poor track record of permitting criminals and terrorists to launder money into their walled-off corporate vaults in exchange for US dollars. A number of well-publicized infractions of institutional finance have resulted in fines rather than technically viable policy adjustments that narrow the loopholes to terrorists and criminals. Wells Fargo, for instance, permitted the Mexican drug cartel to launder $378 billion via their bank in 2010. (Source: The Guardian)
After learning that it had laundered hundreds of millions of dollars for terrorists, the drug cartel, and sanctioned regimes, the US fined HSBC $1.9 billion in 2012. (From the New York Times). JP Morgan, America’s largest institutional bank, was fined $5.3 billion by the US Treasury in 2018 for violating Cuba and Iran sanctions 87 times. (Sabah Daily)
Conventional Financing Against Bitcoins
If bitcoin and peer-to-peer finance continue to gain popularity around the world, the US sanctions strategy will definitely be weakened. However, they have never been effective foreign policy instruments. They appear to be more like effective electioneering tools that fail to achieve foreign policy objectives while giving legislators the illusion of doing something about international problems that their constituents learn about in the news. Sanctions imposed by the United States have likewise failed to achieve serious political change in nations like China, Iran, North Korea, Russia, and Venezuela. –Foreign Relations Council
To influence foreign powers, the US State Department and legislators will have to embrace a new paradigm of positive incentives (carrots over sticks). The United States will continue to be able to impose limits on government foreign aid and direct foreign investment from established US firms whose capital is highly valued in developing countries. If the Federal Reserve System fails to halt Bitcoin, the United States should consider joining the hash power race in order to maintain its worldwide monetary power.
ALSO READ: The IMF Expresses Concerns Regarding Continued Crypto Usage
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/05/01/el-salvadors-bitcoin-surge-predicts-a-modern-us-international-policy-toolbox-op-ed/