Douglas Rodriguez, President of El Salvador’s central bank, dismissed fears that a country that has accepted Bitcoin (BTC) as legal tender will abandon plans for a $ 1.3 billion loan from the International Monetary Fund (IMF).
Rodriguez said the central bank sees no risk in bitcoin law, although it prepares to secure an extended line of credit from the IMF, Bloomberg reported on Tuesday.
The central bank has effectively called El Salvador’s bitcoin law simply “upside risk,” and Rodriguez said a bullish rise in BTC could help the country’s economy grow more than 9% from initial forecasts.
According to Rodriguez, the central bank explained to the IMF that “Bitcoin is just a method of payment.”
As Cointelegraph previously reported, the El Salvadorian government says bitcoin adoption continues to grow as people sell more US dollars to buy bitcoins.
Uncertainty over the fate of negotiations with the IMF, as well as the recent adoption of BTC as legal tender, appears to have had a significant impact on the country’s credit rating.
El Salvador’s bonds fell in September following Bitcoin Day in the country, making the results of the IMF’s loan agreement even more significant.
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According to the central bank, after El Salvador’s external debt rises to $ 18.45 billion in the second quarter of 2021, securing an IMF credit line could be critical to securing access to global markets in 2022.
IMF officials criticized El Salvador’s adoption of bitcoins, calling the move “an unwanted shortcut” that could have serious implications for the country.
Critics of the transition from the mainstream financial sector have pointed to volatility and money laundering as one of the possible systemic risks associated with the adoption of BTC as legal tender.