Rating agency S&P Global has said the legalization of Bitcoin in El Salvador has “immediate negative consequences” for the country’s credit rating, as “the risks of adopting a cryptocurrency outweigh the potential benefits.”
The company’s analysts have called the widespread digital gold in the country unlikely. They have drawn attention to a survey by the Chamber of Commerce and Industry of El Salvador, according to which more than 90% of respondents spoke out against the forced integration of cryptocurrency into the financial system, and 75% announced the further use of US dollars.
S&P Global also noted the widespread protests that took place before and after the law was passed. The human rights organization Cristosal appealed to the country’s Accounts Chamber with a request to check the activities of the board of directors of the bitcoin fund established by the government.
According to experts, Bitcoin can have a big impact on the economy of El Salvador, since its size is quite small. The country’s GDP does not exceed $25 billion, while international trade accounts for 60% of this amount, and remittances account for 25%, according to S&P Global.
The report says:
“This means that if Bitcoin is widely used for cross-border transactions, the impact of the high volatility of the cryptocurrency on the economy will be significant. […] On the other hand, as a defense against US sanctions and other sovereign risks, the transition to bitcoin does have some advantages.”