El Salvador to open a "Bitcoin Embassy" in Texas
El Salvador continues to be an innovative force in the world of crypto as the first country to adopt Bitcoin as legal tender has now established a relationship with the government of Texas and plans to open a Bitcoin Embassy in the United States.
The announcement of this new intergovernmental collaboration was made via Twitter by Milena Mayorga, the Salvadoran Ambassador to the United States, who on Tuesday posted a message discussing the results of a meeting she had with officials from Texas.
“In my meeting with the assistant secretary of the government of Texas, Joe Esparza, we discussed the opening of the second Bitcoin Embassy and the expansion of commercial and economic exchange projects,” Mayorga said.
Texas and El Salvador already share extensive business ties, with the two parties seeing a commercial exchange of $1,244,636,983 worth of value in 2022, according to Mayorga.
This new partnership is looking to set up a Bitcoin Embassy – which will also function as El Salvador’s representative office – in Texas to work on new joint projects that promote Bitcoin adoption. It follows the establishment of the first Bitcoin Embassy in Lugano, a city in the south of Switzerland, which took place in October.
Texas lawmakers are some of the most active in the U.S. when it comes to developing regulations and establishing partnerships in the field of blockchain technology. Currently, there is a bill up for consideration in the State legislature that calls for the creation of “a master plan for the expansion of the blockchain industry,” according to Forbes. The goal of the initiative is to turn Texas into the crypto capital of the country by “introducing tax-free shopping with bitcoin, among other proposals.”
While this latest development has been greeted with excitement by the crypto community, not everyone is happy with El Salvador’s continued push to promote Bitcoin, including the Internation Monetary Fund (IMF), which on Monday recommended that the country reconsider its plans to increase exposure to Bitcoin.
The IMF made the recommendation following a visit to the country, highlighting the risks associated with the government's exposure to the cryptocurrency and calling on El Salvador to address a multitude of concerns.
"While risks have not materialized due to the limited Bitcoin use so far—as suggested by survey and remittances data—its use could grow given its legal tender status and new legislative reforms to encourage the use of crypto assets, including tokenized bonds (Digital Assets Law)," the IMF said on Friday.
The IMF also called for greater transparency from El Salvador due to a high level of uncertainty and advised the country to refrain from financing Bitcoin purchases through the issuance of tokenized securities due to the financial risks involved.
"Given the legal risks, fiscal fragility and largely speculative nature of crypto markets, the authorities should reconsider their plans to expand government exposures to Bitcoin, including by issuing tokenized bonds. The use of proceeds by the new Bitcoin Fund Management should follow regular expenditure controls and good governance practices," the IMF's statement said.
Last month, El Salvador passed a law to regulate the issuance of other digital assets. El Salvador's Congress voted on the Digital Assets Issuance bill, which allows the country to issue the first round of 'volcano bonds' to pay down foreign debt and build up the 'Bitcoin City' investment haven.