A report from the rating agency Fitch Ratings, published last Friday, June 25, indicates that the law approved in El Salvador that converts bitcoin into legal tender implies risks for banks, including violations of the provisions against money laundering and terrorist financing.
The Fitch Ratings report affirms that the legal instrument that will come into effect on September 7, «would increase the regulatory, financial and operational risks of financial institutions, including the possibility of violating international norms against money laundering and terrorist financing ”. Fitch is, along with Moody’s and Standard & Poors, among the most important credit rating agencies in the United States.
The rating agency maintains that the possibility of using bitcoin in financial obligations, including loans banking institutions, could increase bitcoin traffic through the country, which “may increase the risks that proceeds from illicit activities pass through the Salvadoran financial system,” according to Fitch.
Fitch noted 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 clients. The agency claims that “the lack of transparency of bitcoin could increase the risk of money laundering.” Regarding this last information, it should be noted that all bitcoin transactions are public, and that its accounting book is open and transparent.
The The agency highlights 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 the implementation of bitcoin, 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 the propensity to support corporate headquarters, 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 an address, broadcast on the national chain last Thursday 24, President Bukele announced the availability as of September of a bitcoin wallet, through mobile applications, for all Salvadorans, as we reported in this medium. The bitcoin wallets will be delivered with an initial balance of USD 30 in BTC, and will be used to receive funds and make payments in BTC and in dollars.