The IMF warns CAR against the adoption of Bitcoin as legal tender citing ”legal, economic, and transparency issues.”
Lightning Round:
- The International Monetary Fund feels that this decision might result in substantial economic issues.
- The IMF has already encouraged El Salvador to reconsider its decision to adopt Bitcoin.
Different government agencies from across the world expressed their displeasure and opposition to El Salvador’s innovative move to recognize Bitcoin as a legal tender.
Making Bitcoin a legal tender is still a novel approach to financial inclusion, and it poses a challenge to established banking operations, which are the source of these worries in most cases.
CAR Under the Watchful Eye of the IMF
Following up on earlier reports, the CAR overwhelmingly approved the law governing Bitcoin on April 25, by unanimous consent.
Despite this, the IMF warns CAR against sovereign financial choices.
As a result, it became the first country in the region and the second country in the world to make Bitcoin legal tender following El Salvador.
According to Gourna Zacko, Minister of Digital Economy, the goal of drafting the measure was to remove the Central Bank’s ability to exercise control over the economy.
According to Bloomberg, the IMF stated in their warning to the CAR the following in relation to the same issues:
“The adoption of Bitcoin as legal tender in CAR raises major legal, transparency, and economic policy challenges. IMF staff are assisting the regional and Central African Republic’s authorities in addressing the concerns posed by the new Law.”
Typical IMF Behavior
When El Salvador approved Bitcoin, the IMF did not hold back and even urged the country to rescind its decision.
In a letter to El Salvador President Nayib Bukele, the International Monetary Fund expressed concern over Bitcoin’s potential impact on financial stability, financial integrity, and consumer protection, to the point of delaying El Salvador’s request for a $1.3 billion loan from the IMF.
Because traditional financial systems will continue to fail to recognize the opportunities and advantages of Bitcoin, three-letter agencies will continue to regard Bitcoin as a threat rather than an advancement, because to them it is.
Bitcoin will be the future financial system. The IMF just hasn’t come to grips with it yet.
