After the Central African Republic (CAR) last month introduced the Bitcoin announced as legal tender and the use of cryptocurrencies legalized, the International Monetary Fund (IMF) warned that such a move could lead to financial instability in the country.
The criticism followed the organization repeatedly voicing opposition to El Salvador’s adoption of bitcoin and President Nayib Bukele’s ambitious plan to launch bitcoin-backed bonds.
- The global authority stated that the macroeconomic and legal uncertainties surrounding Bitcoin adoption are worrying. In a reply email to Bloomberg, the IMF noted:
“The introduction of Bitcoin as legal tender in the Central African Republic raises major legal, transparent and economic policy challenges. IMF staff are assisting the region and CAR authorities in addressing concerns raised by the new law.”
- Criticism in itself was nothing new from the IMF. Earlier this year, the fund described El Salvador’s move to accept Bitcoin as its currency as “a major risk” to the market that could create “contingent liabilities.” Additionally, the IMF cited “price volatility” and lack of use cases as the top issues facing Bitcoin as legal tender.
- As the first African country to recognize bitcoin as its currency, the Central African Republic faced backlash from the international community and its domestic opposition forces. The government is accused of passing such a law without consulting opposition parties and the regional central bank, which is responsible for managing the currency used by CAR and five other regional countries.
- Authorities said the adoption of Bitcoin as legal tender will propel the country’s economic recovery and growth after decades of civil war.
- As reported by CryptoPotato last month, the existing CAR currency is not currently recognized by the IMF. This makes international trade with the nation – and a dozen other African countries – extremely difficult and heavily dependent on France. The Central African Republic is considered by the United Nations to be one of the poorest countries in the world, with only 11% of the population having access to the internet.
Featured image courtesy of Al Arabiya
Source: Crypto News Deutsch