Moody’s drops El Salvador rating, cites new Bitcoin law as reason

El Salvador

TL;DR Breakdown

  • Moody’s have decreased the rating for El Salvador, the first country to adopt Bitcoin as legal tender.
  • This reduction in the El Salvador’s rating is mainly due to the Bitcoin law that weakened the nation.
  • Moody’s claims that the new law caused great inconvenience and tension with other countries and within the nation.

The new Moody’s ratings have seen a significant drop befall El Salvador. The ratings have been decreased due to the negative view of the country’s economy after the passing of the Bitcoin law; the catalyst for the rating decrease.

The negation of the ratings has put the first country to adopt Bitcoin as legal tender in a bad position. Now, the country’s economy is being considered of lower quality and deteriorating.

El Salvador and Moody’s ratings

The rating of the nation is now seen as quite poor, primarily because of the promotion and passing of the Bitcoin law by the President of El Salvador. The President has been actively defending his decision for the adoption of Bitcoin for payment services.

Moody’s rating has taken a lot of factors into consideration. These factors mostly revolve around the development of the Bitcoin law in the nation. According to the results, El Salvador has created tensions with other nations like the United States due to the new law.

The situation with other nations

The new law has been viewed as poor decision-making that will affect the economy of the nation, worsening the conditions of the nation. The condition of the nation is largely dependent on its relationship with external nations, and with the adoption of Bitcoin as legal tender, mining has also become an issue for other nations.

Owing to these circumstances, the gradual progress of El Salvador towards the International Monetary Fund might be facing a huge blow as the situation with other nations worsens progressively.

Dennis Mugambi

Dennis Mugambi

Dennis is a content writer with a deep understanding of the blockchain domain and cryptocurrency field. He infuses cold data with flair to make technology and finances mind-blowing. His reports both fascinate and awaken the readers.

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