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US Lawmakers Introduce Companion Bill To ‘mitigate Risks’ From El Salvador’s Bitcoin Law

Senators Jim Risch (R-Idaho), Bob Menendez (D-NJ), and Bill Cassidy (R-La.) have introduced the “Accountability for Cryptocurrency in El Salvador Act,” or “ACES Act,” according to the Senate Committee on Foreign Relations.

According to the press release, the proposed measure calls for a State Department report on El Salvador’s use of bitcoin as legal money, as well as “a strategy to minimize any vulnerabilities in the US financial system.” The State Department would study El Salvador’s use of bitcoin as legal money, as well as the implications for cybersecurity, economic stability, and democratic government.

El Salvador legalized Bitcoin alongside the US dollar in September of last year. Since then, the country has gained 1,801 BTC.

The US isn’t the only country worried about El Salvador’s Bitcoin law. In November of last year, Andrew Bailey, Governor of the Bank of England (BOE), voiced concern about bitcoin being used as legal tender in El Salvador.

Furthermore, the International Monetary Fund (IMF) has repeatedly urged the Philippines to stop using bitcoin as legal tender. According to the IMF, the costs of making Bitcoin legal tender exceed the potential benefits.

On the other hand, El Salvador finds no need to relax its Bitcoin laws. President Bukele anticipates that two more countries will join.

Several US lawmakers have introduced legislation to mitigate the risks of El Salvador’s acceptance of bitcoin as legal tender. “El Salvador’s embrace of bitcoin as legal currency opens the door to money laundering cartels and harms US interests,” a US lawmaker said.

Bitcoin Payments Decline As Other Cryptocurrencies Grow

BitPay Inc, the leading crypto payment processor, has witnessed a major shift to the type of digital assets used in purchases since last year. According to BitPay, BTC usage at businesses fell to 65% from 92% since 2020, which is quite a major drop. Furthermore, the ETH was also only 15% of worldwide transactions, and other currencies like the LTC and Dash have increased.

Businesses are now more interested in investing in stable coins frequently for cross-border payments since November as the crypto values depreciate over time. Similarly, consumers are also more interested in investing in stablecoins as the value is mostly constant, resulting in lower risks in the volatile market.

As per the report, the growing popularity of stablecoins is one of the common factors for being a very common alternative for the other coins. For example, DOGE became notoriously famous for the results of their followers, such as Elon Musk. Musk announced that DOGE could be used to purchase DOGE merchandise.

This new trend definitely suggests that individuals are more inclined towards holding BTC instead of spending it, which is a great strategy in this market. The BTC prices increased by 60% in 2021, irrespective of the fourth quarter’s volatility. According to the crypto payment company, most of the crypto transactions were in the luxury industry, such as jewelry, watches, or even automobiles. The transactional values for the high-end items via their company have increased relatively from 31% in 2021 to a meager 9% in 2020. The payment volume rose about 57% in 2021, as per the CEO of BitPay, Stephen Pair.