The United States is asking El Salvador to regulate the use of Bitcoin (BTC) in its territory. Fearing that the digital currency will compete with the king dollar, Washington is pointing to criminal activity related to cryptocurrencies...
United States warns El Salvador
This Wednesday, June 30, 2021, Victoria Nuland, the U.S. Undersecretary of State for Political Affairs, met with Nayib Bukele, the President of El Salvador. Unsurprisingly, the Undersecretary spoke about El Salvador’s decision to adopt Bitcoin as its legal tender.
« I suggested to the president that whatever El Salvador chooses to do, they need to make sure it’s well-regulated, transparent and accountable, and that they protect themselves from malicious actors », warns Victoria Nuland, Agence France-Presse reports.
According to Victoria Nuland, the U.S. has been taking a “hard look at Bitcoin” since the Colonial Pipeline cyberattack. On May 7, a ransomware attack crippled all operations of oil pipeline operator Colonial Pipeline. The company transports about 45% of the fuel consumed on the East Coast of the United States.
DarkSide, the criminal network behind the cyberattack, quickly demanded a Bitcoin (BTC) ransom worth $4.4 million. The attack caused a fuel shortage in several cities across the country. With its back to the wall, Colonial Pipeline paid the requested ransom. In early June, the FBI managed to recover 85% of the cryptocurrencies paid to the hackers.
The blockchain, the storage technology behind the Bitcoin protocol, made it possible to recover the ransom paid by Colonial Pipeline thanks to its traceability. The ledger indeed keeps track of all the transactions made on the network.
👉 Related: El Salvador to distribute Bitcoin (BTC) to all its inhabitants
El Salvador's adoption of Bitcoin faces opponents
The U.S. suggests that the adoption of Bitcoin may be accompanied by an increase in criminal activity. Yet the share of cryptocurrency transactions linked to criminal activity is decreasing year after year. According to a report by Chainalysis, criminal activity accounts for only 0.34% of overall transaction volume in the year 2020. So cryptocurrency is far from being the exclusive domain of criminals.
One imagines that Washington regrets above all that the queen of cryptocurrencies does not come to overshadow the US dollar, the other official currency of El Salvador. The country adopted the dollar as its national currency in 2001.
El Salvador’s historic decision has drawn mixed reactions. While the Central American Bank for Economic Integration (CABEI) immediately announced its support for Nayib Bukele, other organizations opposed the adoption of Bitcoin in El Salvador.
This is the case of the International Monetary Fund (IMF), which considers cryptocurrencies too risky, or the World Bank, which has categorically refused to help El Salvador in its transition to Bitcoin.
Conversely, many South American countries are considering following El Salvador’s lead. Mexico is accelerating the development of a Bitcoin law. Paraguay, meanwhile, has hinted that the country may turn to cryptocurrency. Political leaders in Panama and Colombia have also come out in favor of the digital currency.
Also read: in El Salvador, the opposition wants the Bitcoin law recognized as “unconstitutional”
Translated with www.DeepL.com/Translator (free version)