S&P Global said that the risks of the country’s decision to make bitcoin legal tender outweighed its potential benefits.
The credit rating agency S&P Global said El Salvador’s decision to adopt bitcoin as legal tender had “immediate, negative implications,” according to a Reuters article on Thursday.
-
S&P said that bitcoin adoption could deter El Salvador from participating in an International Monetary Fund support program, increase financial weaknesses and impair banks by generating currency mismatches when they look to loan money, Reuters said.
-
“The risks” of El Salvador’s bitcoin adoption “seem to outweigh its potential benefits,” S&P said, according to Reuters. “There are immediate negative implications for (the) credit.”
-
The agency has given El Salvador a B- rating and a “stable” outlook.
-
Bitcoin became legal tender in El Salvador on Sept. 7 to great fanfare but has continued to spur protests among critics who say the law is not constitutional. The law was passed by a supermajority in El Salvador’s legislature on June 9.
-
In July, the ratings agency Moody’s downgraded El Salvador’s long-term, foreign-currency issuer and senior unsecured ratings from B3 to Caa1 and continued a negative view of the country’s economy partly because of the government’s passage of the bitcoin law.
All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.
Recommended Content
Editors’ Picks
Prisma price tanks 25% after nearly $9 million exploit
Prisma Finance (PRISMA) is being exploited, and the attacker has so far pulled $9 million in Ethereum from the borrowing protocol. Prisma asked vault owners to take the necessary steps to protect funds from the ongoing attack in an official tweet on X.
Meme coins gain traction after SEC’s partial win in Coinbase lawsuit: DOGE, SHIB, BRETT, POPCAT, BODEN
US SEC pocketed a partial win in its lawsuit against Coinbase, ushering a correction in crypto prices on Thursday. Despite the broad pullback, prices of meme coins like Dogecoin, Shiba Inu and Solana-based BRETT, POPCAT and BODEN increased.
Ondo moves $95 million worth of OUSG assets to BUIDL as tokenized fund attracts $245 million since debut
Ondo Finance (ONDO) announced on Wednesday that it's shifting about $95 million worth of its OUSG's underlying assets to the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
XRP price stuck below $0.65 resistance, Ripple lawsuit could suffer from Coinbase defeat
XRP price falls slightly to $0.61 on Thursday after its landmark programmatic sales ruling in July, which gave Ripple a partial victory against the US SEC, failed to reverberate in a similar legal battle between the regulator and crypto exchange Coinbase.
Bitcoin: BTC may have recovered, but is it out of the woods?
Bitcoin’s (BTC) upward momentum has shown a significant decline for the past two weeks or so. This development led to a bearish signal on the weekly and an uncertain outlook on the monthly.