HomeLatestACES Act is an Attack on El Salvador’s Bitcoin City
ACES Act is an Attack on El Salvador’s Bitcoin City
March 25, 2022 - by Kevin Flynn
ACES Act is an Attack on El Salvador’s Bitcoin City
Nayib Bekele is furious, and justifiably so. The El Salvadoran president went on a rant yesterday shortly after the US Senate pushed the Accountability for Cryptocurrency in El Salvador (ACES) Act past the committee stage. “We are not your colony,” he proclaimed. “This action is a threat to our country’s sovereignty.” That may be true, but this is deeper than that.
El Salvador adopted Bitcoin as legal tender in 2021 when they rolled out a state-owned digital wallet called Chivo. Their main currency prior to that was the US dollar, which is still widely used there today. The rollout wasn’t what concerned US lawmakers. It’s phase two of the plan that America fears: the construction of “Bitcoin City.”
“First they ignore you, then they laugh at you, then they fight you, then you win.” No one took Bekele seriously when he was elected. The world laughed when El Salvador adopted Bitcoin, until El Presidente started inviting crypto miners to town. Bitcoin City could become the largest crypto mining operation in the world. ACES is a weapon to stop that.
Crypto Mining Market Size Could Top $5 Billion by 2028
On the surface, ACES looks like a move that could benefit US crypto miners. The bill calls for a risk assessment of El Salvador’s adoption of Bitcoin (BTC), phrasing it as a “potential risk to the United States financial system.” That’s not a shot at El Salvador. It’s a move to discredit Bitcoin as a national currency. No one in the industry benefits from that.
Bitcoin miners in the United States like Riot Blockchain (RIOT) and Marathon Digital Holdings (MARA) aren’t concerned about Bitcoin City. They’re both multi-billion-dollar companies with an established footprint in the space. Argo Blockchain (ARBK) and Soluna Holdings (SLNH) are building renewable energy data centers. They’re not going anywhere.
According to a study published by Brandessence Market Research last month, the crypto mining market size hit $2.2 billion in 2021. It’s growing with a compound annual growth rate (CAGR) of 28.5%. That should put it at 5.3 billion by 2028. US lawmakers think that ACES will give them a larger piece of that pie. They’re not seeing the forest through the trees.
El Salvador is the Point of the Sword for DeFi
The world needs a decentralized digital currency. Recent events in China and Ukraine have produced evidence that it’s the only way to limit government abuse of the financial system. The Russian people have learned painfully that the world banking conglomerates controls the fate of their economy. If it can happen there, it can happen here too.
Nayib Bekele is a visionary. He’s made his nation the tip of the sword in the battle for global DeFi by adopting Bitcoin as a national currency. Other nations, like China, are trying to roll out their own digital currency. They’re missing the point too. One currency, not controlled by any central bank, balances the scales between superpowers and the rest of the world.
This is scary stuff, especially for those of who’ve enjoyed US dominance of world markets our entire lives. Can we do that without government-controlled currency? I’d like to think that we can. Global adoption of Bitcoin doesn’t limit our opportunities. It expands on them. Nayib Bekele recognizes this. The US Senate should follow his lead.
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About the Author:
Kevin Flynn
A former financial professional and founder of AdvisorScale Financial Writing, Kevin lives in Leominster, Massachusetts with his wife Evelyn, two cats, and nine wonderful grandchildren.
