The US warns that the use of bitcoin in El Salvador favors money laundering

Washington, March 1 (.).- The United States warned on Tuesday that the adoption of the as legal tender in El Salvador complicates the fight against money laundering and the financing of terrorism in the country.

This was indicated by the US State Department in the volume on money laundering of its annual report on the International Narcotics Control Strategy, sent to Congress on Tuesday.

“The rapid growth of virtual currencies favors the evolution of various crimes, including money laundering, and presents new challenges for societies and their governments,” the report states in its introduction.

In its section on El Salvador, the document recalls that the Central American country adopted bitcoin as legal tender last year, and that in the same period it only made “limited progress in combating money laundering.”

“The introduction of the bitcoin cryptocurrency as a legal currency will only further complicate the fight against money laundering and combating the financing of terrorism,” stresses the State Department.

The report recalls that El Salvador’s “dollarized economy,” combined with the free movement of citizens in the region, makes the country “attractive to money launderers,” and that there is a “significant lack of oversight in some financial services”.

The US analysis comes two weeks after three US senators presented a legislative initiative for the State Department to design a plan that “mitigates the risks” that the adoption of bitcoin in El Salvador has for the US financial system. Savior.

Republican Senator Jim Risch stated that the adoption of cryptocurrency affects “the economic and financial stability” of the Central American country, and “may weaken the US sanctions policy, empowering China and organized crime.”

The president of El Salvador, Nayib Bukele, reacted to this US initiative with a blunt “stay out of our internal affairs.”

The International Monetary Fund (IMF) has urged El Salvador to “eliminate the quality of legal tender” from bitcoin and has expressed its “concern” about the issuance of bonds backed by cryptocurrency.

The risk measurement agency Fitch Ratings lowered El Salvador’s long-term credit rating and among the reasons it cited the “uncertainty” of reaching an agreement with the IMF, after the adoption of bitcoin.

In its report, the State Department again cites a hundred countries as the main places of money laundering in the world, a list that only has two changes compared to last year: the departure of Russia and the inclusion from Seychelles.

In addition to El Salvador, numerous Latin American and Caribbean countries appear on the list, such as Argentina, Bolivia, Brazil, Colombia, Costa Rica, Cuba, Ecuador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, Republic of Dominican and Venezuela.

The United States itself also appears on the list, along with Spain and other European countries such as Italy, the United Kingdom, Belgium and the Netherlands.