Fitch Ratings has joined the long line of opposition in regards to El Salvador’s Bitcoin Legal Tender. The global credit rating agency has alerted the nation of substantial risks post-BTC adoption. Fitch Ratings argue that BTC legal tender will cause credit negative for local insurance companies. This would mean, profits can quickly convert into losses and vice versa.
BTC adoption may cause Credit Negative
The agency highlighted El Salvador’s uncertain BTC adoption plans for traditional markets. It stated that the country’s lack of clarity in policymaking, combined with crypto’s high volatility, may result in unwanted outcomes, especially for insurers.
“El Salvador’s recent legislation establishing bitcoin as a legal tender will likely be a credit negative for local insurance companies with exposure to the newly established currency due to higher FX and earnings volatility risk as well as additional regulatory and operating risk considerations.”, according to Fitch Rating
Bitcoin Upswings Coming Soon: Matrixport’s Bitcoin Greed and Fear Index
Even though Bitcoin’s failure to stay above the $30k mark did bother most in the crypto space, if…
