A report by the rating agency Fitch Ratings, published last Friday, June 25, notes that the law passed in El Salvador that turns bitcoin into legal tender, involves risks for banks, including violations of the provisions against money laundering and the financing of terrorism.
The Fitch Ratings report states that the legal instrument that will enter into force on September 7, ” would increase the regulatory, financial and operational risks of financial institutions, including the possibility of violating international standards against money laundering and the financing of terrorism.” Fitch is, along with Moody’s and Standard & Poor’s, among the largest credit rating agencies in the United States.
The rating agency argues that the possibility of using bitcoin in financial obligations, including bank loans, could increase bitcoin traffic across the country, which “may increase the risks that proceeds from illicit activities will pass through the Salvadoran financial system,” according to Fitch.
Fitch stressed that financial regulations must conform to global standards set by the Financial Action Task Force (FATF), which include recommending that cryptocurrency companies share information about their customers. The agency claims that “bitcoin’s lack of transparency could increase the risk of money laundering.” Regarding the latter information, it should be noted that all bitcoin transactions are public, and that your ledger is open and transparent.
The agency notes that the ratings of the largest banks in El Salvador are based on the support provided by the corporate headquarters of these institutions. “Fitch believes that foreign parent banks would provide operational and technical support to manage the risks associated with bitcoin implementation, as all operations are consolidated at the headquarters level,” the agency maintains. However, it states that the impact of regulatory and reputational risks will be incorporated into Fitch’s assessment of corporate headquarters ‘ propensity to support, once the scope of the new regulation is defined.
As reported by CriptoNoticias, on June 8 the Legislative Assembly of El Salvador approved the so-called Bitcoin Law, introduced by President Nayib Bukele. This law made El Salvador the first country to grant legal tender to bitcoin.
In a speech, transmitted on national television last Thursday 24, President Bukele announced the availability from September of a wallet or bitcoin wallet, through mobile applications, for all Salvadorans, as we report in this medium. Bitcoin wallets will be delivered with a starting balance of $ 30 in BTC, and will serve to receive funds and make payments in BTC and dollars.