The International Money Fund (IMF) has added its voice to institutions and parties criticizing the Central African Republic (CAR)’s decision to adopt bitcoin. The IMF asserts that the adoption is a legal challenge not only for the country, but the whole region.
CAR’s Bitcoin Adoption Has Financial and Legal Issues
The IMF has reportedly said the CAR’s recent decision to adopt bitcoin poses a number of challenges for the country and the region. The comments by the global lender mark the first time it has publicly reacted to CAR’s decision to make bitcoin legal tender.
According to Bitcoin.com News the IMF has not forgotten about the similar decision made in El Salvador 2021. After the initial announcement, the international lender warned that the adoption of Bitcoin would create a number of legal and macroeconomic problems. The IMF asked El Salvador in January 2022 to abandon the Bitcoin law. However, this request was rejected by El Salvador.
Reacting to the CAR’s decision, the IMF again warned the African country’s adoption of bitcoin posed legal and economic challenges.
“The adoption of Bitcoin as legal tender in C.A.R. This raises significant legal, transparency and economic policy issues. IMF staff are assisting regional and Central African Republic’s authorities in addressing the concerns posed by the new law,” the IMF reportedly said in emailed responses to Bloomberg.
CAR’s Low Internet Penetration Rate
Officials in Africa insist that bitcoin legal tender adoption will drive economic growth. But, opposition has argued against it. They point to the CAR’s low internet penetration rates as well as the state of its economy.
Meanwhile, the Bloomberg report suggests the CAR’s decision to adopt bitcoin was hastily made, and without consulting stakeholders. According to reports, the Bank of Central African States has stopped the CAR from adopting bitcoin.
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