El Salvador Gets Some Advice from the U.S. Regarding BTC
El Salvador has opened its country to bitcoin transactions, and the news has spread like wildfire. To some, such as the World Bank, the idea of an entire nation running on BTC is risky and frightening, but to others – like senior regulators in the U.S. – El Salvador is going to need a lot of help as it leads the rest of the world towards a new digital era.
El Salvador Gets Some Assistance from U.S. Lawmakers
Victoria Nuland – the Under Secretary of State for Political Affairs – stated in a recent interview that she had the honor of meeting with El Salvador’s president Nayib Bukele as a means of advising him on what direction he should take his bitcoin ambitions. Among her recommendations was to implement appropriate regulatory tactics to ensure that El Salvador does not fall victim to financial crime or other problems associated with bitcoin and its altcoin cousins.
I did suggest to the president that whatever El Salvador chooses to do, you ensure that it is well regulated, that it is transparent and that it is responsible, and you protect yourself against malign actors.
Bitcoin has been at the center of several of the world’s leading financial crimes. Among the most recent include a ransomware attack on the Colonial Pipeline, in which a bitcoin ransom of more than $2 million was requested by the hackers.
In addition, the African cryptocurrency exchange Africrypt is now at the center of a massive legal investigation after more than $3 billion in digital currency funds simply vanished overnight. The owners of the exchange are now being sought for questioning and are widely believed by law enforcement to have been involved in the disappearance of the money.
As El Salvador opens its borders to bitcoin transactions, there will undoubtedly be a lot to prepare for. For example, if individuals are really going to be eager to utilize bitcoin to pay for goods and services, they will need to be ready for the asset’s vulnerability to price swings. As we have seen many times in the past, bitcoin can move up or down without a moment’s notice, and at press time, investors are really feeling the pain.
Jumping Back and Forth
Bitcoin ultimately hit a new all-time high of approximately $64,000 in mid-April, though two months later, the currency had lost nearly half that value, marking the largest drop in the currency’s history.
To prepare its people, El Salvador is giving all its adult residents who sign up for its new “Chivo” digital wallet $30 in bitcoin. The country initially sought assistance from the World Bank, only to get kicked to the curb. Still, the nation’s Congress decided to give bitcoin payments the green light, making El Salvador the first and only country at the time of writing to have declared BTC legal tender.
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