IMF Voices Concerns Over Central African Republic Bitcoin Adoption

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BitcoinPolitics

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On April 27th, 2022 it was confirmed that the Central African Republic (C.A.R.) declared Bitcoin legal tender. Along with the CFA franc, Bitcoin is now allowed to be used for various payments, services, and even taxes within the country. 

One week after the country’s announcement as the second nation in the world to adopt Bitcoin as legal tender, the International Monetary Fund (IMF) stated that C.A.R.’s choice to adopt Bitcoin will present a “series of challenges.” 

The IMF had a similar response to El Salvador’s adoption of Bitcoin as legal tender back in January. The financial institution called for the country to drop Bitcoin as legal tender under concerns of the risks associated with Bitcoin’s financial stability, integrity, consumer protections, and the fiscal contingent liabilities.

C.A.R.’s decision to move forward with making Bitcoin legal tender was criticized by opposition parties. Additionally, it was later revealed that the Bitcoin legislation was passed without the regional central bank’s knowledge.

The IMF explained in an email to Bloomberg that “The adoption of Bitcoin as legal tender in C.A.R. raises major legal, transparency, and economic policy challenges.” They went on to share that their staff are making efforts to assist regional and CAR’s authorities based on their concerns.

C.A.R.’s intentions are to stabilize the country after years of little economic growth and a ten year long civil war in the region. The African Development Bank expects C.A.R.’s $2.3 billion economy to expand 5.1% in 2022. Currently, only 557,000 of its 4.8 million people have access to the Internet. Leaders are anticipating that the adoption of Bitcoin will attract foreign investment and spur incentives to build more infrastructure within the country.

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Deniz Saat is an IT services specialist, technical writer and editor for BTC Times. His mission is to onboard as many people as possible into the Bitcoin overlay through education and content creation.



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