El Salvador’s top central bank says Bitcoin adoption will have no impact

Douglas Rodriguez, president of the Central Bank of El Salvador, denied concerns that the introduction of Bitcoin (BTC) as legal tender would undermine plans for a $ 1.3 billion International Monetary Fund (IMF) loan.

According to Bloomberg on Tuesday, Rodriguez stated that the central bank sees no risks associated with the Bitcoin law even as it prepares to secure an extended loan from the IMF.

In fact, the central bank has described El Salvador’s Bitcoin law as just “bullish risks,” with Rodriguez saying the BTC bull run could help the country’s economy grow 9% more than expected.

According to Rodriguez, the central bank told the IMF that “Bitcoin is simply a payment method.”

As previously reported by Cointelegraph, the El Salvador government says Bitcoin adoption continues to grow as people sell more US dollars to buy BTC.

The uncertainty about the fate of the IMF negotiations, as well as the recent acceptance of BTC as legal tender, appear to have had a significant impact on the country’s creditworthiness.

El Salvador’s bonds fell sharply in September after “Bitcoin Day” in the country, which makes even more sense for the outcome of the IMF loan agreement.

Related: El Salvador is removing the BTC price feed from the Chivo app to prevent people from expanding the arbitrage

As El Salvador’s external debt rose to $ 18.45 billion in the second quarter of 2021.

IMF officials have criticized El Salvador’s introduction of Bitcoin, describing the move as an “unforeseen shortcut” that could have dire consequences for the country.

Critics of the switch from the mainstream financial sector have pointed to volatility and money laundering as possible systemic risks in the acceptance of BTC as legal tender.