Ambassador: U.S. "afraid and concerned" about El Salvador's bitcoin initiative

On Wednesday, El Salvador’s ambassador to the U.S. claimed that the Central American country is one step ahead when it comes to cryptocurrency adoption and poses a threat to other countries including the U.S.

“They are afraid and concerned because a lot of countries are looking at us, and they will follow our leadership,” ambassador Milena Mayorga said in an interview with Coin Desk, an international cryptocurrency news platform.

Last Saturday, President Nayib Bukele announced the country’s plan to build a low-tax, cryptocurrency-based city at the base of the Conchagua volcano. The “Bitcoin City” plans to use the geothermal energy from the volcano to power the city and also mine Bitcoin. The city's urban planners would aim to be a mecca for bitcoin investors.

"Residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, rail - everything devoted to Bitcoin," said Bukele.

In September, Bitcoin was made a legal currency along with the U.S. dollar, which it adopted in 2001. This move was part of a larger scheme to put Bitcoin at the center of the country’s economy.

As part of the move, the government released a digital wallet app and gave away $30 in Bitcoin to every citizen.

“I know the concerns here in D.C. are about losing the power of the dollar and we can understand that, but El Salvador has to move on [because] it wants to be on a different level,” Mayorga said.

El Salvador’s bitcoin experiment has caused widespread concern. Earlier this week, the International Monetary Fund (IMF) said El Salvador should not use bitcoin as legal tender and urged the country to strengthen the regulations around the new national currency.