- The International Monetary Fund (IMF) has warned the Central African Republic about Bitcoin.
- The IMF claimed that the adoption of Bitcoin could have a negative impact on the country’s economic and financial stability.
- The IMF predicts that the CAR economy will grow by 2.2% this year and 3.0% next year.
The International Monetary Fund (IMF) has warned the Central African Republic about Bitcoin and expressed concerns about financial stability.
IMF Warns CAR About Bitcoin
The International Monetary Fund (IMF) has asked the Central African Republic (CAR) to reconsider its decision to accept Bitcoin as a legal payment method.
The CAR, a landlocked country in Central Africa, drew attention last year by adopting Bitcoin. At the time, the IMF claimed that this step could have a negative impact on the country’s economic and financial stability.
In its latest report, the IMF states that this legal regulation poses a number of risks and legal issues, including threats to macro-fiscal and financial integrity. As a result, the IMF is calling on the CAR to withdraw Bitcoin’s legal payment status and cancel the guaranteed convertibility of crypto assets.
Interestingly, the IMF predicts that the CAR economy will grow by 2.2% this year and 3.0% next year. This positive outlook is an encouraging sign for the country’s development.
Concerns About Financial Stability
In the report, the IMF expressed concerns about possible financial instability risks associated with the acceptance of cryptocurrency as a legal payment method. According to the IMF, the absence of central management and regulation, along with their volatile nature, could jeopardize the stability of the CAR’s financial system.
In particular, the organization emphasized that traditional tools used by central banks to manage financial stability, such as interest rate changes and monetary interventions, could become ineffective in the face of Bitcoin’s volatility.
In addition, the international organization directed its criticism towards the digital currency project Sango initiated by CAR President Faustin-Archange Touadéra.
The IMF stated that this initiative, which aims to tokenize the country’s national resources, has experienced a significant failure. According to the report, the CAR has achieved sales of less than $2 million with Sango tokens, representing only 0.2% of total expected sales.
The IMF’s Role in Financial Management
As digital assets become more important, the IMF has recognized the need to address their impact on economies and financial stability, leading to expanded participation in digital asset regulations. For example, the IMF demanded stronger consumer protection laws in Africa following the collapse of the FTX exchange.
