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IMF worried about Central African Republic’s adoption of BTC

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The adoption of BTC as legal tender by the Central African Republic (CAR) at the end of April is coming under fire from the International Monetary Fund (IMF), which has widely rebuked the use of BTC by nations.

According to the fund, the adoption of cryptocurrency by the country located in central Africa is fraught with problems for both the country and the region in general.

As Bloomberg reported, for the IMF, the initiative adds problems “in the field of law, economic policy and transparency”.

IMF against BTC adoption in El Salvador

The Central African Republic is the second nation in the world to consider BTC a legal tender. In September 2021, El Salvador created the BTC Law and became the first nation to do so.

Shortly after the country passed the law establishing BTC as legal tender, the IMF drew numerous criticisms. the background he said, for example, that cryptocurrency adoption could involve “significant risks”. Therefore, he asked the authorities “a very careful analysis”.

The warning in question was made by IMF spokesman Gerry Rice. He highlighted that the initiative involved complex issues:

“The adoption of BTC as a legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis. Therefore, we are following developments closely and will continue our consultations with the authorities.”

Then, when BTC had already been adopted, the IMF insisted for the country to abandon cryptocurrency. President Nayib Bukele ignored the criticism and followed through with his actions to expand the use of the digital currency.

IMF vs BTC

Now, it seems, the IMF is doing the same with CAR. The fund said it was working with the country’s authorities to find solutions to “these problems”.

The head of the IMF’s African Department, Abebe Aemro Selassie, said last week that a “robust” payment system with financial transparency and a governance structure must be in place when adopting cryptocurrencies.

Furthermore, he claimed that BTC was not a “panacea” for Africa’s economic problems.

More recently, Selassie told Bloomberg that adoption presents a number of challenges for the country and region.

As highlighted, the CAR’s adoption of BTC raises major legal, transparency and economic policy challenges:

“IMF officials are assisting Central African Republic and regional authorities to address concerns posed by the new law.”

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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