{"id":8037,"date":"2021-08-17T12:40:33","date_gmt":"2021-08-17T11:40:33","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=8037"},"modified":"2021-08-17T12:40:33","modified_gmt":"2021-08-17T11:40:33","slug":"el-salvadors-bitcoin-adoption-will-pose-risk-to-local-insurers-fitch-ratings","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/el-salvadors-bitcoin-adoption-will-pose-risk-to-local-insurers-fitch-ratings\/","title":{"rendered":"El Salvador’s Bitcoin adoption will pose risk to local insurers – Fitch Ratings"},"content":{"rendered":"\n
Fitch Rating has also given its opinion on El Salvador's Bitcoin law<\/a> stating that \u201cadditional holdings of high-risk assets will only compound this risk.\u201d <\/h5>\n\n\n\n
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Fitch Ratings has become the latest global credit rating agency to warn El Salvador against adopting Bitcoin (BTC) as legal tender, expressing concerns that crypto assets could cause systemic risks for the Latin American nation\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>.<\/p>\n\n\n\n

Citing the country\u2019s lack of clarity in Bitcoin\u2019s implementation in mainstream markets, Fitch Ratings warned about the inherent volatility and operational risks for citizens associated with the crypto ecosystem.<\/p>\n\n\n\n

In addition, the agency pointed out El Salvador\u2019s ongoing exposure to low credit quality securities, stating that \u201cadditional holdings of high-risk assets will only compound this risk.\u201d<\/p>\n\n\n\n

In early June, the Salvadoran Legislative Assembly passed President Nayib Bukele\u2019s controversial \u201cBitcoin Law,\u201d paving the way for BTC to be recognized as legal tender alongside United States dollars starting Sept. 7, 2021. As such, all Salvadoran businesses will be required to accept Bitcoin in exchange for goods or services.<\/p>\n\n\n\n

Fitch predicts that insurance firms<\/a>, which made 21% of El Salvador\u2019s total capital in 2020, will be hesitant to adopt Bitcoin for claims or benefit payments.<\/p>\n\n\n\n

The agency speculates that insurers will likely seek to \u201cconvert Bitcoin into USD as quickly as possible to limit exchange risks\u201d should policyholders opt to pay premiums in digital currency.<\/p>\n\n\n\n

While governments and leaders continue to weigh the pros and cons of Bitcoin\u2019s move into mainstream finance, El Salvador finance minister Alejandro Zelaya has assured the International Monetary Fund (IMF) that the country will continue to use both U.S. dollars and Bitcoin.<\/p>\n\n\n\n

Before this development, the country had requested a $1.3-billion loan from the IMF<\/a>, which has now proved to become a conflict of interest for the United Nations-led organization.<\/p>\n\n\n\n

Moreover, the World Bank has also backed out from helping El Salvador make Bitcoin legal tender.<\/p>\n","protected":false},"excerpt":{"rendered":"

Fitch Rating has also given its opinion on El Salvador’s Bitcoin law stating that \u201cadditional holdings of high-risk assets will only compound this risk.\u201d Fitch Ratings has become the latest global credit rating agency to warn El Salvador against adopting Bitcoin (BTC) as legal tender, expressing concerns that crypto assets could cause systemic risks for […]<\/p>\n","protected":false},"author":12,"featured_media":8116,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[83],"tags":[152,456,2253,2254],"class_list":["post-8037","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news","tag-bitcoin","tag-el-salvador","tag-fitch-ratings","tag-local-insurers"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/08\/image-188.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/8037","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=8037"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/8037\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/8116"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=8037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=8037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=8037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}