The government of the Central African Republic has received a demand from the Bank of Central African States (BEAC) to repeal the law accepting bitcoin as a means of payment.
At the end of April, the Central African Republic became the second country to legalize bitcoin, following the example of El Salvador. However, the decision caused bewilderment of regulators. Last week, the International Monetary Fund (IMF) criticized the actions of the CAR authorities, warning that this could destroy the country’s economy. This week BEAC sending a letter to the Minister of Finance of the Central African Republic, expressing fears that, being legal in the republic, bitcoin will compete with the Central African franc.
This may have a negative impact on the financial stability of the other five African states that are part of the Economic Community of Central African Countries (ECOCAS) and use the same fiat currency: Gabon, Cameroon, Republic of the Congo, Chad and Equatorial Guinea. BEAC urged the CAR government to avoid policies that would encourage fluctuations in the Central African franc. The regulator is concerned that with the help of cryptocurrencies it will be easier for criminals to launder money, finance terrorism and public unrest in the region. Since 2012, the armed conflict between the government and the rebels has continued in the CAR. Cameroon is fighting separatists, and Chad is fighting Islamic extremists.
Financial Capital economist Willy Delort Heubo noted that over the past three years, the number of transactions using bitcoin in the region has quadrupled. He believes that the decision of the CAR authorities to accept BTC as legal tender violates the pact signed by the countries of the region to protect financial security and economic development. According to Heubo, bitcoin transactions will now be even more difficult to control, especially when the regulator has already given the green light to bitcoin.
The Economic and Monetary Community of Central Africa (CEMAC) called on BEAC to implement a monetary policy that would be aimed at reducing the poverty of the population. CEMAC economist and consultant David Kunde warned that if the Central African Republic does not repeal the bitcoin legalization law, sanctions could be applied to the state.
Recall that recently the Central Bank of Uganda warned users against investing in crypto assets. At the same time, the regulator is studying the risks and benefits of launching its own digital currency.
Source: Bits
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