After El Salvador, IMF is now concerned about Bitcoin in the Central African Republic
The International Monetary Fund (IMF) criticized the Central African Republic’s decision to adopt bitcoin as its official currency, as El Salvador did. The IMF insists that adoption poses legal economic challenges not just for the country but also for the region.
The IMF said the recent decision by the Central African Republic to adopt bitcoin presents a number of challenges for the country and the region. The global lender’s comments mark the first time he has publicly reacted to the Central African Republic’s decision to make bitcoin legal tender.
As the Bitcoin.com news portal reported, the IMF was and still is critical of a similar decision that was taken by El Salvador in 2021. After the initial announcement, the global lender warned that the adoption of bitcoin would pose several macroeconomic questions, and legal issues.
In January 2022, the IMF urged El Salvador to abandon the bitcoin law, but this was rejected by the country.
Reacting to the Central African Republic’s decision, the IMF again warned that the African country’s adoption of bitcoin posed legal and economic challenges.
“The adoption of Bitcoin as a legal tender in the Central African Republic raises major legal, transparency and economic policy challenges. The IMF team is assisting Central African Republic and regional authorities to address the concerns posed by the new law,” the IMF said in emailed responses to Bloomberg.
While officials in the African country have insisted that adopting bitcoin as a legal tender will help spur economic growth, opponents argue otherwise. They point to the country’s low internet penetration rates as well as the state of its economy.
Meanwhile, the Bloomberg report suggests that the Central African Republic’s decision to adopt bitcoin was taken in haste and without consulting interested parties. The decision was criticized by the regional central bank, the Bank of Central African States.