The rating agency Fitch Ratings downgraded El Salvador’s long-term international issuer risk ratings (IDR) to “CCC” from “B-“, due to concerns about the concentration of power of President Nayib Bukele and the use of bitcoin as a currency. legal tender in the Central American country.
According to a report released by Reuters last week, the reduction is also due to greater financing risks derived from a greater dependence of the nation on short-term debt and a fiscal deficit at high levels, the agency highlighted in its report. .
Fitch said last year’s adoption of bitcoin as legal tender has added uncertainty over the potential for an International Monetary Fund (IMF) program that will unlock financing for the nation between 2022 and 2023.
The rating agency also warned about a high concentration of power in the hands of Bukele, which, it said, has increased the unpredictability of the direction of public policies.
As recalled, President Bukele recently predicted that a BTC price surge could come very soon. Citing the number of millionaires globally, the president said that if they decide to own at least 1 BTC, there will not be enough for all of them.
Back in January, Fitch Ratings issued a warning to US energy providers about cryptocurrency miners. According to the company, few states are capable of supplying the energy needs of mining.
Source: Larepublica
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