The International Monetary Fund (IMF) has expressed alarm over the adoption of bitcoin by the Central African Republic. This development continues the recent trend of the regulatory body’s disapproval of crypto adoption.
IMF expresses concerns over Central African Republic crypto adoption
The biggest news over the week was the adoption of bitcoin by the Central African Republic alongside the CFA franc. This development made it the second country after El Salvador to take this route.
However, this development has raised alarm bells with the IMF which considers this move as the ‘’cryptonization’’ of certain economies. The regulatory body warns that the African country could face dangers due to its fragile economy.
‘’The adoption of Bitcoin as legal tender in the Central African Republic poses major challenges in terms of transparency, legality and economic policy.
The IMF further noted that it was assisting authorities of the Central African Republic and the region to respond to concerns raised by the new law.
Central African Republic crypto law is not without controversy
The Central African Republic shares the use of the CFA franc with six other countries. The decision to adopt BTC was taken without consultation with them, and especially without consultation with the Governor of the Bank of Central African States (BEAC).
These are the two points that have also raised concerns at the regional and global levels. Other questions were raised: Internet access is very underdeveloped in the Central African Republic, yet it is necessary to carry out Bitcoin transactions. Only 557,000 inhabitants would have access to it, out of the 4.8 million in the country.
We will therefore carefully observe the spread of this new currency in the Central African Republic. Beyond risk considerations, this once again shows one thing: it is the most fragile economies that are turning to Bitcoin, not finding a solution in conventional monetary systems.