LONDON (Reuters) – El Salvador’s adoption of bitcoin as legal tender has immediate negative implications for its credit rating S&P Global said on Thursday.
S&P said the main risks were that it could threaten its hopes of securing a support program with the International Monetary Fund, increase fiscal vulnerabilities, and hurt banks by creating currency mismatches when they dish out loans.
S&P currently rates the central American country at B- with a ‘stable outlook. Moody’s cut its El Salvador rating to Caa1, it’s equivalent of one rating notch below B-, at the end of July. It also kept the rating on a downgrade warning.