The organization, which works with developing countries to promote a sound monetary policy and sustainable growth, has warned the Central African Republic of the catastrophic repercussions of the leadership’s decision to allow payments in crypto— for both tax and merchant payments.
After repeated pre and post warnings to El Salvador for its adoption of Bitcoin as a legal tender, the IMF has now expressed its concerns regarding CAR. CAR uses the CAR franc pegged to the EURO, and El Salvador uses the US dollar.
A law legalizing cryptocurrencies and recognizing Bitcoin as a legally recognized currency was signed just last week by CAR President Faustin Archange Touadera. The parliamentarians passed it after a unanimous vote.
The passing of this legislation means the CAR is only the second country globally and the first in the African continent to recognize Bitcoin as a legal tender. The IMF’s concerns were similar to what they have been raising since El Salvador adopted BTC as a legal tender. The organization has concerns about the unpredictability of Bitcoin costs and the chance of lawbreakers utilizing digital money for criminal purposes. After almost doubling in value before the end of last year, Bitcoin has plunged in value.
The CAR franc has faced excess inflation, and the move is said to improve the economic situation and increase the financial inclusion of its citizens. There are also provisions in the newly passed legislation to fine crypto offenders in the country. Up to 100,000,000 to 1,000,000,000 Financial Community of Africa (CFA) francs could be fined, and a jail time of up to 20 years is also on the cards for serious offenses.