Despite the crypto community hailing CAR's action as progressive, the International Monetary Fund has warned that adopting Bitcoin legal cash is risky and will "create a number of hurdles for the country and the region," according to Bloomberg.
On April 27, President Faustin-Archange Touadéra signed a draft measure into law that aimed to provide a legal regulatory framework for cryptocurrencies while also making Bitcoin and the country's euro-backed CFA franc legal tender. President Faustin praised the move, saying it will "better the conditions of the nation's population" and put the CAR "on the map of the world's boldest and most visionary governments."
The move is alleged to have irritated a segment of nationals, particularly from opposition parties and the regional central bank, who felt that they were kept out of the decision-making process in the run-up to the IMF's new statements.
The Central Bank For West African States (BCEAO) is a regional bank that administers the CFA Franc on behalf of six central African countries, including the Central African Republic.
“The adoption of Bitcoin as legal tender in C.A.R. raises major legal, transparency, and economic policy challenges," IMF stated in an email in response to questions asked by Bloomberg.
A BCEAO spokeswoman indicated earlier this week that they were just made aware of CAR's plan to adopt bitcoin at the same time as the republic. According to Reuters, two previous CAR prime ministers signed a unilateral statement calling the move a "severe violation."
The Central African Republic (CAR), which is now the world's second country to embrace Bitcoin after El Salvador did so last year, has stated its intention to alleviate poverty brought on by a decade-long civil war. Although the IMF has yet to make a formal remark on the country's Bitcoin policy, officials from the IMF were allegedly working with authorities to fix issues.
The IMF had previously advised El Salvador to temper its desire for Bitcoin as legal tender, instructing Bukele not to use the country's treasury funds to buy the cryptocurrency in January. The IMF has noted increasing financial risks induced by Bitcoin's volatility since November 2021, a situation that could become even worse for the CAR.