After Moody’s, the credit rating agency issued a warning about the risk of El Salvador’s credit downgrade on account of Bitcoin; President Nayib Bukele stated in capital letters that “El Salvador doesn’t care.”
The Bukele government last year made bitcoin legal tender alongside the dollar. Also, it announced the purchase of at least 1,391 bitcoins with public funds, exposing the country to extreme cryptocurrency volatility. Moody estimates that the country’s Bitcoin assets are underwater after the recent fall in BTC price.
Moody’s analyst Jaime Reusche told Bloomberg that the investment raises the risk of the sovereign’s credit outlook. Moody’s cited unsustainable policies made last year in its decision to downgrade the country to the levels of Angola and Iraq.
El Salvador doesn’t care.
You probably never heard about El Salvador before the adoption of Bitcoin. Despite this, after introducing the Bitcoin Law on September 7, 2021, the country seems to be in the spotlight both from the media and international bodies.
The latest attack on the country came from the risk rating agency Moody’s, which sees perils in Bitcoin purchases made by the government. The words below are from Moody’s analyst Jaime Reusche, told to Bloomberg.
“[Government Bitcoin holdings] certainly increase the risk. [Trading Bitcoin] is quite risky, particularly for a government that has struggled with liquidity pressures in the past.”
Nayib Bukele, president of El Salvador, doesn’t like Moody’s statements. On his Twitter, he posted the message “BREAKING: EL SALVADOR DGAF,” using the acronym ‘DGAF’ “Don’t Give A Fu.k” which translates “fu. k you” or “I don’t care” if you want to avoid profanity.
“BREAKING: EL SALVADOR DOESN’T CARE”
BREAKING: EL SALVADOR DGAF https://t.co/VuJ25PcvQL
— Nayib Bukele ?? (@nayibbukele) January 17, 2022
Amazingly, the most challenging part has already been done. El Salvador is the first country to adopt Bitcoin, using it both as a currency and as a store of value.
This sets precedents for others who wish to use a BTC to guide their economy. Thus escaping from problems such as inflation caused by creating more money, as happens with paper currencies.
In Bukele’s predictions, he believes that at least two other countries will adopt Bitcoin as a currency this year. Fidelity, one of the largest asset managers globally, said that countries that anticipate would benefit.
Previously IMF and Bank of England Governor expressed some serious concerns over El Salvador’s adoption of Bitcoin as legal tender.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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