S&P mentioned the primary dangers have been that it might threaten its hopes of securing a help programme with the International Monetary Fund, improve fiscal vulnerabilities and harm banks by creating forex mismatches once they dish out loans.
“The dangers related to the adoption of bitcoin as authorized tender in El Salvador appear to outweigh its potential advantages,” S&P mentioned. “There are fast damaging implications for (the) credit score”.
S&P at the moment charges the central American nation at B- with a ‘secure’ outlook. Moody’s reduce its El Salvador ranking to Caa1, its equal of 1 ranking notch beneath B-, on the finish of July. It additionally stored the ranking on a downgrade warning.