Bitcoin adoption wont affect IMF talks, says El Salvadors top central banker

Douglas Rodriguez, president of the Central Reserve Bank of El Salvador, has dismissed fears that the country adopting Bitcoin (BTC) as legal tender will scupper plans for a $1.3-billion loan facility from the International Monetary Fund (IMF).

According to Bloomberg on Tuesday, Rodriguez stated that the central bank does not see any risks associated with the Bitcoin Law even as it prepares to secure an extended loan facility from the IMF.

Indeed, the central bank described El Salvadors Bitcoin Law as only having upside risks, with Rodriguez stating that a BTC bull run could help the countrys economy expand by over 9% more than initial forecasts.

According to Rodriguez, the central bank has explained to the IMF that Bitcoin is simply a payment method.

As previously reported by Cointelegraph, El Salvadors government says Bitcoin acceptance continues to grow with people selling more United States dollars to buy BTC.

Uncertainty over the fate of the IMF talks, as well as the recent BTC adoption as legal tender, has seemingly had a significant effect on the countrys credit rating.

El Salvadors bondsdeclined sharply in September following Bitcoin Day in the country, putting even more significance on the outcome of the IMF loan deal.

Related: El Salvador removes BTC price feed from Chivo app to crack down on arbitrage scalpers

According to central bank figures, with El Salvadors external debt rising to $18.45 billion in Q2 2021, securing the IMF loan facility could be crucial to ensuring access to the global market in 2022.

IMF officials havecriticized El Salvadors Bitcoin adoption, calling the move an inadvisable shortcut that could have dire consequences for the country.

Critics of the move from the mainstream finance sector have pointed to volatility and money laundering as among the likely systemic risks posed by accepting BTC as legal tender.