Douglas Rodriguez, president of El Salvador’s central bank, has denied fears that the country adopting Bitcoin (BTC) as legal tender will undo plans for a $ 1.3 billion credit facility from the International Monetary Fund (IMF) will.
According to Bloomberg on Tuesday, Rodriguez stated that the central bank sees no risks related to the Bitcoin law even as it prepares to secure an extended credit facility from the IMF.
In fact, the central bank described El Salvador’s Bitcoin law as just “upside risks”.
According to Rodriguez, the central bank has told the IMF that “Bitcoin is simply a method of payment”.
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 talks, as well as the recent introduction of BTC as legal tender, appear to have had a significant impact on the country’s creditworthiness.
El Salvador bonds fell sharply in September after “Bitcoin Day” in the country, adding even more importance to the results of the IMF lending business.
Related: El Salvador is removing the BTC price feed from the Chivo app to take action against arbitrage scalpers
As El Salvador’s external debt rose to $ 18.45 billion in the second quarter of 2021.
IMF officials have criticized the introduction of Bitcoin in El Salvador, calling the move “an inadvisable 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 arising from the acceptance of BTC as legal tender.