El Salvador at risk of financial ruin »Cryptocurrency insiders

embracing Bitcoin (BTC) By the Central American nation of El Salvador has caused quite a few troubles for regulators and watchdogs all over the world. Bitcoin has become legal tender in the country, and the government has also bought a large amount of bitcoin for the treasury. Well-known credit rating agency Moody’s states that these developments could cause major problems in the country in the future.

Bitcoin adoption

Moody’s analyst, Jaime Rocchi, said during a Interview with Bloomberg He knows he doesn’t think the developments in El Salvador are particularly plausible. According to him, the financial risks to El Salvador through bitcoin investments are currently very high.

The credit outlook in El Salvador was already poor already, with investment and even trading in the largest Cryptocurrency Roshi says the danger to the country will increase. He argues that government bitcoin assets certainly add to the risk portfolio.

At the time of writing, El Salvador has 1,391 bitcoins in its vault. This is not enough to create a significant financial risk immediately. Reusche said that should this amount increase in the future, which is very likely given the convictions of President Bukele, the risk of financial catastrophe will increase.

Credit rating

In July this year, Moody’s downgraded El Salvador to Caa1. In Moody’s view, this grade represents an extremely high credit risk. At the time, the reason given was the deterioration of politics. Of course, that means embracing bitcoin.

Moody’s is clearly not fascinated by the far-reaching adoption of Bitcoin in El Salvador. They, like other large financial institutions, make themselves Like the International Monetary FundSerious concerns about financial stability.

But President Najib Boukil and other proponents of developments in the country will not care much about the negative reactions. They firmly believe in the world of cryptography and what it can mean for countries all over the world.