The decision of the Central African Republic to adopt the largest cryptocurrency, Bitcoin, as legal tender did not go well with many central banks in Africa as they expressed their dissatisfaction with the move.
Accordingly, a letter purportedly coming from the concerned central banks has revealed that CAR’s decision will harm the country.
The Bank of Central African States (BEAC), which is also in support of the extreme ruling of the International Monetary Fund (IMF), has sent a letter to CAR citing the negative impact its adoption of Bitcoin is having on the economic prospects of the region as well as the monetary stability of the whole Central African States.
Cointelegraph revealed that the Governor of the BEAC was the signatory of the letter sent to CAR, where the negative impact of Bitcoin adoption was highlighted.
The association of central banks wants CAR to rethink its decision due to what would become of the region’s economy in the years to come.
CAR Dissociates Self from CFA
The Central African Republic is reported to have ceased using the adopted CFA, the currency used by all former French colonies in Africa. It is widely believed that the decision taken by CAR can negatively affect others in the region.
Experts argue that the concern raised by other Central African and West African states is legitimate, considering how financially tied former French colonies were to their colonial masters. CAR’s being the first former colony to do such is borderline audacious.
However, the other 14 former French colonies that still use the Euro pegged CFA have often hinted that they do not see an economic future with the current colonial currency arrangement.
Meanwhile, others believe that any sovereign country’s decision to change its monetary and economic strategy should not be questioned, especially if it has not done anything likely to affect others’ wellbeing.
For many, the decision of CAR to adopt Bitcoin may be commendable as it is an avenue that many have been reluctant to follow. Still, the country should brace up for what is to come after implementing its new policy.
Many believe that international financial organizations would deploy bullying tactics to scare the tiny nation from its self-adopted economic move, but this may or may not affect the outcome of the action taken by CAR.
However, if the international financial institutions decide to make a move, it is bound to have a devastating effect on the targeted country.
The IMF, and indeed, all central banks worldwide, have a preconceived notion about the hegemony of the dollar and the Euro, and their number one mission is to maintain their grip on developing countries that attempt to wriggle away from their stranglehold.
If the CAR can keep its new policy in place until the central bank-issued digital currencies begin circulating, they can consider their decision a win. But if they cannot tarry for a while, then the long economic hammer of the IMF-led financial institutions will be devastating.