The International Monetary Fund (IMF) believes that the adoption of bitcoin by the Central African Republic (CAR) as a means of payment will violate the transparency of the economy in the country.
IMF declaredthat “the acceptance of bitcoin as legal tender in the CAR raises serious legal, transparency and economic policy issues.” The Fund expressed its readiness to provide financial support to the Republic in eliminating the consequences of a short-sighted decision.
“IMF staff stands ready to help the authorities in the region and the Central African Republic resolve issues related to the new law,” the IMF said.
The reaction of the International Monetary Fund followed immediately after the Central African Republic announced that the country would become the second after El Salvador to adopt cryptocurrency. The decision drew criticism from opposition parties and was made without consultation with the regional central bank, which manages a common currency used by six countries, including the Central African Republic.
The government of the Central African Republic has said that the adoption of bitcoin as legal tender will help CAR’s economic recovery and growth, and help stabilize the country, torn apart by a decade of civil war.
The country is indeed in a difficult economic situation. The $2.3 billion economy, which the African Development Bank predicts will grow 5.1% this year, ranks 188 out of 189 in the United Nations Development Program’s Human Development Index. The country has low life expectancy and extreme poverty. Only 557,000 out of 4.8 million people have access to the Internet.
The IMF is wary of any movement of countries in creating alternative financial systems based on cryptocurrencies and digital currencies of the Central Bank. The Foundation has repeatedly called on the El Salvadoran government to stop recognizing bitcoin as legal tender. In February, the IMF said that Nigeria’s central bank’s state-owned cryptocurrency could be used for money laundering and terrorist financing.
Source: Bits
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