The International Monetary Fund (IMF) has added its voice to organizations and groups critical of the Central African Republic’s (CAR) decision to accept bitcoin. The IMF emphasizes that adoption has created legal and economic challenges not only for the country but also for the region.
CAR has financial and legal issues with accepting bitcoins
The IMF says CAR’s recent decision to accept Bitcoin poses a number of challenges for the country and the region. Bitcoin marks the first time lenders around the world have commented publicly on CAR’s decision to conduct a legal tender.
As reported by Bitcoin.com News, the IMF criticized a similar decision taken by El Salvador in 2021 and is still doing so. Following the initial announcement, lenders around the world warned that the adoption of Bitcoin could lead to a number of macroeconomic, financial, and legal problems. In January 2022, the IMF requested El Salvador to repeal the Bitcoin Act, but this was later denied.
In response to CAR’s decision, the IMF again warned that the African country’s acceptance of bitcoin posed legal and economic challenges.
“Accepting Bitcoin as a legal tender in CAR raises major legal, transparency and economic policy challenges. IMF staff are assisting regional and Central African Republic authorities in addressing the concerns raised by the new law,” the IMF said in an emailed response to Bloomberg.
Low internet penetration rate of CAR
Opponents have argued otherwise, although authorities in African countries have insisted on accepting bitcoin, saying legal tender would help economic growth. They point to CAR’s low internet penetration rate as well as its state of the economy.
The Bloomberg report, meanwhile, suggests that CAR’s decision to accept Bitcoin was hasty and was made without consulting stakeholders. The move to adopt Bitcoin has been reportedly condemned by the regional central bank, the Central African State Bank.
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