S & P Global has revealed that El Salvador’s introduction of Bitcoin as legal tender had immediate negative effects that outweighed its potential benefits.<\/p>\n\n\n\n
Notably, El Salvador’s recognition of Bitcoin has brought “immediate negative implications” on the country’s creditworthiness.<\/p>\n\n\n\n
El Salvador’s move could also affect the country’s chances of securing a $1 billion loan agreement from the International Monetary Fund.<\/p>\n\n\n\n
Other risks, according to S & P Global, include the fact that El Salvador’s Bitcoin adoption would increase fiscal vulnerabilities, and the fact that such a decision could hurt banks by creating currency mismatches in lending.<\/p>\n\n\n\n
S & P Global stated: “The risks associated with the adoption of bitcoin as legal tender in El Salvador seem to outweigh its potential benefits.”<\/p>\n\n\n\n
El Salvador’s President Nayib Bukele announced plans in June to adopt Bitcoin as legal tender. Prior to the announcement, the U.S. rating agency Fitch gave El Salvador a B- rating in April 2020, classifying the country as high risk with a negative outlook.<\/p>\n\n\n\n
For more information, read the <a rel=”noopener” href=”https:\/\/www.reuters.com\/article\/el-salvador-bitcoin-ratings-s-p\/el-salvadors-bitcoin-adoption-has-immediate-implications-for-rating-sp-global-idUSKBN2GC1Z7″ target=”_blank”>original story<\/a> in Reuters<\/p>\n\n\n