The Cameroon-headquartered Bank of Central African States (BEAC) has urged the Central African Republic (CAR) to annul a law it passed in late April that made the cryptocurrency Bitcoin legal tender. The bank warned in a letter made public last week that the move breached its rules and could affect monetary stability in the region.
BEAC said the CAR’s decision to make Bitcoin legal tender could compete with the Central African Franc (CFA), the region’s France-backed currency.
A letter from the bank’s governor to the CAR’s finance minister dated April 29, and made public last week, said the move suggests the CAR wants a currency beyond the bank’s control.
The regional bank’s letter goes on to suggest using the cryptocurrency could upset monetary stability in the six-member Central African Economic and Monetary Community (CEMAC).
CEMAC members, including the CAR, Cameroon, Chad, Gabon, Equatorial Guinea, and the Republic of Congo, use the CFA Franc as currency.
The bank urged the CAR to comply with CEMAC in promoting economic and financial cooperation and avoiding policies that may lead to monetary fluctuations.
But economists note cryptocurrency is growing in popularity and difficult to control.
Financial Capital economist Willy Delort Heubo said Bitcoin transactions have quadrupled in the region in the past three years.
He said the decision by the CAR to adopt Bitcoin as legal tender is a violation of a community pact signed by the six member states of (CEMAC) to protect the economic block’s financial integrity and economic development. However, Heubo said despite the region’s policies against making Bitcoin legal tender, it is very difficult to stop cryptocurrency transactions when people agree to use it as a means of payment.
The BEAC has also expressed concern that cryptocurrencies could make it easier for criminals to launder money and sponsor terrorism or rebellions in the region.
The CAR has been in conflict…
