IMF says CAR's adoption of bitcoin as legal tender raises legal and economic concerns

Regulation • May 4, 2022, 5:04PM EDT
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The International Monetary Fund (IMF) is assisting the Central African Republic (CAR) in addressing concerns posed by its recent move to adopt Bitcoin as legal tender. 

The IMF, which works to promote sustainable growth and sound monetary policy for member states, told Bloomberg today that the CAR's adoption of Bitcoin as legal tender raises major legal, transparency and economic policy challenges. 

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Last week, CAR President Faustin Archange Touadera signed a law legalizing cryptocurrencies and making bitcoin a legally recognized currency in the country following a unanimous parliamentary vote.  CAR officials also said the nation is moving forward with broad-based crypto adoption plans.

The signing made it the first African nation to adopt bitcoin as legal tender, and only the second country in the world after El Salvador to make the move. Both El Salvador and the CAR don't use a native currency.

The IMF also took issue with El Salvador's decision to adopt bitcoin as legal tender. The fund's executive board urged the country to remove the cryptocurrency's legal tender status in January of this year, citing "large risks associated with the use of Bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities."

About Author

Aislinn Keely is a reporter on The Block's policy team holding down the legal beat. She covers court decisions, bankruptcies, regulatory actions and other key moments in the legal sphere, putting them in context for the wider crypto industry. Before The Block, she lent her voice to the NPR affiliate WFUV and helmed Fordham University's student newspaper. Send tips or thoughts on all things policy and legal to [email protected] or follow her on Twitter for updates @AislinnKeely.