At the end of last month, the Central African Republic officially launched bitcoin (BTC) legal tender created. That means the world’s largest cryptocurrency there is legal money. With that, with El Salvador and a Special Economic Zone of Honduras, it is the only country in the world where BTC is legally accepted money. But the International Monetary Fund (IMF) is not particularly supportive of the African country either.
IMF skeptical about bitcoin law
huhet IMF was very critical when El Salvador made the same announcement last year doath† Poorer countries can turn to this institute if they run into financial difficulties, after which the IMF can give the countries a loan in Special Drawing Rights (SDR), the currency of the IMF. The organization therefore has a financial reason not to allow countries to switch to an alternative, and at the same time wants to encourage stability.
dat writes Bloomberg† huhThe IMF emphasizes that legal acceptance of bitcoins is a challenge for regulation, according to the business newspaper. The organization is working with the country’s government to ensure that the decision does not turn into a financial disaster. It is and remains a poor African country. Legislation, transparency and economic policy may be challenges due to the new law.
Bitcoin may not be so practical
Vaccording to the World Bank only one tenth of the population of the Central African Republic has an internet connection. That makes Bitcoin payments very complicated, especially since legal tender basically means that sellers are not allowed to refuse payments in BTC. Africanews interviewed a number of regular residents in the country. Many of them were not even aware of the existence of cryptocurrencies like bitcoin. Still, the government is very optimistic and emphasizes that just a weak internet connection is enough to buy cryptocurrencies. In addition, the government wants to provide the country with fiber optic.
Ook some entrepreneurs in the country are skeptical, according to Africanews. It is emphasized that the country already has enough problems of a more practical nature, such as access to drinking water, energy sources, internet, good roads and enough safety. Of course you can pay for this with cryptocurrency, but it is logical that the population does not really see this as a priority.
VFurthermore, Africanews cites Bitcoin as a striking choice for its purpose of use. For large-scale payments, it is important that the network has a low throughput of transactions. That is not the case with bitcoin, emphasizes Ousmène Jacques Mandeng of de London School of Economics and Political Science. Whether Bitcoin will provide new financial opportunities or challenges, we will see in the future.