The International Monetary Fund (IMF) has warned that the Central African Republic’s acceptance of Bitcoin as legal cash creates a number of issues. When El Salvador embraced Bitcoin, the world authorities highlighted the same concerns, notably macroeconomic and legal problems. The country, which is one of the poorest in the world, became the second in the world to accept bitcoin last week, following El Salvador. The central African Republic is the first African country to recognize Bitcoin as legal money.
The International Monetary Fund (IMF), which aims to promote sustainable growth and sound monetary policy for member countries, warned Bloomberg today that the Central African Republic’s adoption of Bitcoin as legal tender creates significant legal, transparency, and economic policy problems.
The Central African Republic, like other countries and businesses becoming more involved in cryptocurrency, believes that accepting Bitcoin as legal tender can aid its suffering economy. This might signal the beginning of a new wave of countries embracing Bitcoin as legal cash. Developing countries, in particular, stand to benefit from the asset class, since it has the potential to assist modernise economies and stimulate innovation, particularly in countries with significant unbanked populations who rely heavily on remittances.
According to WorldCat, only 4% of people in CAR had internet connectivity in 2019, whereas the CFA Franc, like most other former French colonies in Africa, is the country’s currency.
The Central African Republic’s government stated that the use of Bitcoin will assist the country’s economy recover and flourish, as well as help stabilize the country, which has been decimated by a decade-long civil war.
Following a unanimous parliamentary vote, CAR President Faustin Archange Touadera signed legislation legalizing cryptocurrencies and making Bitcoin a legally recognized currency in the country last week. CAR officials also stated that the country is moving forward with broad-based cryptocurrency adoption plans.
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