S&P Warned El Salvador Over Bitcoin Decision

S&P warned El Salvador over Bitcoin decision. S&P said the decision will affect the country's rating.

While El Salvador's official introduction of Bitcoin in the cryptocurrency market is still on the agenda, the international credit rating agency S&P stated that this decision will have an impact on the rating. S&P Global explained that El Salvador's adoption of Bitcoin as a legal currency would have immediate negative effects on the country's credit rating. S&P said the key risks associated with this move include threatening hopes for the country to reach a support agreement with the International Monetary Fund (IMF), exacerbating fiscal vulnerabilities and negatively impacting lending banks by creating a currency mismatch. S&P said, "The risks arising from the adoption of Bitcoin as a legal currency in El Salvador outweigh the potential benefits of this step. There will be immediate negative effects on the credit rating." The international credit rating agency S&P had set El Salvador's credit rating as B - and its outlook as stable.