According to a US diplomat, this event prompted officials to take ‘another hard look at bitcoin.’

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Many people see the market for the world’s largest cryptocurrency as a way to make money. However, because of the risk component associated with it, namely its volatility, it is viewed as an unstable investment choice. This also emphasises the need of having a risk appetite in order to reduce or absorb losses. However, bitcoin has recently become more profitable for governments and individuals that are capable of managing the underlying risk.

The same was the topic of discussion in a recent meeting between US and El Salvador government of officials.

The U.S. Under Secretary of State for Political Affairs, Victoria Nuland during an earlier interaction with the El Salvador President Nayib Bukele had discussed the country’s Bitcoin law. Referring to this discussion during the meeting with other El Salvador officials later, Nuland assured them that and the President, had “talked about the implementation of Bitcoin as legal tender in the country.”

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The senior US State Department official added:

“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.”

This development came soon after the Colonial Pipeline cyberattack that made the US authorities take “another tough look at bitcoin.” According to Nuland,

“The attack in May forced a temporary halt of operations at Colonial, which transports about 45 percent of the fuel consumed on the east coast of the United States. The company agreed to pay a ransom in bitcoin worth $4.4 million to the hackers.”

The International Monetary Fund recently stated that it was in discussions with El Salvador about its position on Bitcoin and that it still had reservations about it. Furthermore, the World Bank denied El Salvador’s request for assistance in implementing their measures for the introduction of Bitcoin as official currency last month.

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