In recent news, the International Monetary Fund has displayed a stance towards entities adopting cryptocurrencies. Reportedly, the IMF’s latest opinion is different from its cautious stance towards countries adopting cryptocurrencies.
Sources reveal that the Central African Republic (CAR) has received optimism from the IMF almost a year after it first adopted Bitcoin. The IMF’s positive outlook reflects the country’s economic prospects and the impact of embracing the leading cryptocurrency. The international organization published a detailed report highlighting its positive view of the country’s economic prospects for this year.
In its report, IMF indicates a projected rebound in real gross domestic product (GDP) growth to 2.2%. The agency has pointed to the factors responsible for the growth as the base effect and policy adjustments leading to enhanced fuel supply. The IMF also anticipates an average inflation rate of 6.3% for this year.
According to the report, the projected public debt of the country is expected to remain sustainable. However, IMF further highlights the presence of significant liquidity risks, as indicated by relevant debt indicators.
These risks highlighted by the IMF reportedly arise from potential shortfalls in donor support and challenges in accessing domestic and regional markets. Notably, CAR gained significant recognition and made history by becoming the second country in the world to announce Bitcoin as a legal tender after El Salvador.
Despite being one of the poorest African nations in the world, the CAR has decided to embrace cryptocurrencies. It is also harnessing the potential of Bitcoin to reshape its financial infrastructure and boost its economic prospects.
Right after the passing of Bitcoin as a legal tender in the country, the CAR government wasted no time in framing the groundwork for digital currency integration. Faustin-Archange Touadera, President of CAR, announced their initiative called “Sango Project,” a crypto hub proposed in the country in May 2022.
This project marked CAR’s entry into the crypto world and one of the goals of the project was the Sango Coin listing. Following this, the government announced Bitcoin as a legal tender alongside the CFA franc.
In December last year, the authorities announced some delays in the listing of Sango Coin on crypto exchanges. The reasons behind the delay were found to be prevailing market conditions and marketing considerations.
Then on March 31, the project behind Sango Coin announced additional delays “just for a few weeks,” citing legal and regulatory obstacles. In January, the Sango Project revealed that a government task force is actively working on legal amendments to enable the smooth integration of the cryptocurrency.
Notably, the IMF for long has been against the nations adopting cryptocurrencies and had specifically warned African nations. The IMF had also published highlighting concerns regarding El Salvador’s adoption of Bitcoin as a legal tender.
The IMF chief had stressed the importance of not confusing digital currencies with traditional currencies and called on the government to address its concerns related to financial integrity, fiscal sustainability, and consumer protection.
Not only El Salvador, but the IMF had also raised concerns over CAR’s decision to include crypto in their economy. However, the recent report from the agency highlighting the positives of CAR’s economy is a positive sign for nations considering the adoption of digital currencies.