The International Monetary Fund warned Thursday that Bitcoin is not a solution for Africa’s economic woes, following the Central African Republic’s adoption of the cryptocurrency as legal tender. Read here.
Abebe Aemro Selassie, the head of the IMF’s African department, stated that when adopting cryptocurrencies, a “robust” payment system with financial transparency and a governance framework must be in place.
“It is critical not to see such things as a panacea” for the problems that countries face, he said.
The Central African Republic (CAR) has become the world’s second country to adopt bitcoin as its official currency, following El Salvador, which did so last year.
The Central African Republic (CAR) is one of the world’s poorest and most troubled countries, with a nine-year-old civil war and an economy heavily reliant on informal mineral extraction.
It is one of six countries in Central Africa that use the CFA franc, a regional currency backed by France and pegged to the Euro.
According to the office of CAR President Faustin Archange Touadera, lawmakers passed bitcoin legislation and he signed it into law on Wednesday.
According to Touadera’s chief of staff, Obed Namsio, the move “puts the Central African Republic on the map of the world’s boldest and most visionary countries.”
Last year, the IMF slammed El Salvador’s adoption of the cryptocurrency, warning of “significant risks associated with the use of bitcoin on financial stability, financial integrity, and consumer protection.”
According to the specialized website Coinmarketcap.com, other countries have already begun legislative processes to adopt bitcoin.
Bitcoin’s value has fluctuated wildly, rising by 150 percent last year to a record $68,991 before plummeting dramatically in recent months. On Thursday, it was worth nearly $40,000.00.
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