Problems for El Salvador continue to mount since they have legalized Bitcoins. While they have barely managed to fix the bigs with their dedicated state-run Bitcoin Chivo Wallet, now the world’s top credit rating agency S&P Global has warned of “immediate negative implications” for its credit rating.
The top credit rating agency has said that EL Salvador has damaged its credit rating after making the decision to make Bitcoin a legal tender. A Reuters report claims that making Bitcoin a legal currency has brought financial risks for the Central American country.
S&P has also cast doubts on whether El Salvador will now be able to procure a $1 billion loan from the International Monetary Fund (IMF). They have been seeking financial help from the global body.
In a statement, the credit rating agency S&P said: “The risks associated with the adoption of bitcoin as legal tender in El Salvador seem to outweigh its potential benefits.”
Commenting on whether the Central American country will be able to secure the financial aid its seeking from the IMF, spokesman Gerry Rice said “The potential of an IMF program for El Salvador is under discussion. Again the objectives of that are clear: growth, financial stability and so on. On the specific Bitcoin issue, I think we’ve been fairly clear in our public statements.”
Since El Salvador’s Bitcoin legalization law came into effect earlier this month, they have been facing multiple troubles. Earlier the prices of Bitcoin dropped and it sent panic waves. The country’s ingenious Bitcoin wallet app designed for citizens is not performing and has been pulled down a number of times.