The International Monetary Fund says that the Central African Republic’s (CAR) adoption of Bitcoin as legal tender raises multiple risks and challenges for the entire region.
Bloomberg reports that the IMF is worried enough about the country’s embrace of Bitcoin that its own staff are now personally working with CAR officials to address the issues.
“The adoption of Bitcoin as legal tender in C.A.R raises major legal, transparency, and economic policy challenges,” the IMF said in an emailed statement to Bloomberg. “IMF staff are assisting the regional and Central African Republic’s authorities in addressing the concerns posed by the new law.”
The CAR government announced last week that it adopted BTC as legal tender, making it the second country in history to do so after El Salvador. The decision sparked controversy from opposition political parties and was made without consulting the regional central bank, according to statements from officials.
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CAR uses the Central African Franc, which is also used by Cameroon, Chad, the Republic of the Congo, Equatorial Guinea, and Gabon. Since 1999, it has been pegged to the euro at €1 = 6.55957 FRF = 655.957 XAF.
It is unclear what specifically the IMF is concerned about, as no official statements have been given. Of the country’s 4.8 million person population, only 557,000 of them have access to the internet. According to Salary Explorer, people in the CAR have an average monthly income of about $680.
Obed Namsio, chief of staff of President Faustin-Archange Touadera, told Reuters,
“The president supports this bill because it will improve the conditions of Central African citizens…”
In the statement, he called it “a decisive step toward opening up new opportunities for our country”.
The Bank of Central African States (BEAC), said the move was a “serious offence.”
“The BEAC learned at the same time as the public of the enactment of a new law on cryptocurrency in the Central African Republic,” a BEAC spokesman told Reuters, adding that the bank did not have an official response yet.
