Regional Central Bank Slams Central African Republic for Adopting Bitcoin

Pius Lukong and Yinka Ibukun, Bloomberg News

An illuminated wooden Bitcoin logo inside a cryptocurrency exchange in Barcelona, Spain, on Wednesday, March 9, 2022. Bitcoin dropped back below $40,000, erasing almost all the gains sparked by optimism about U.S. President Joe Biden’s executive order to put more focus on the crypto sector. , Bloomberg

(Bloomberg) -- The Central African Republic adopted Bitcoin in disregard of a decades-old agreement on a common currency with five of its neighbors, a regional monetary authority said.

The CAR’s announcement of the cryptocurrency as legal tender last month was made without consulting the Bank of Central African States. It goes against a “fundamental rule” that all six states of the Central African Monetary Union should use the CFA franc, Governor Abbas Mahamat Tolli said in a letter dated April 29 and seen by Bloomberg.

“The adoption of an official currency other than the CFA franc is problematic in light of measures put in place to manage monetary issuances and monetary policy,” Tolli wrote in the letter addressed to the CAR’s Finance Minister Herve Ndoba. The member state’s new cryptocurrency law “can be read as calling into question the monetary cooperation of central African states.”

Ndoba didn’t immediately respond to calls seeking comment on Tuesday.

Read: Central Bank Caught Unaware as African Nation Endorses Bitcoin

The African nation became the second to adopt Bitcoin as legal tender after El Salvador, despite concerns around using cryptocurrencies and its low internet connectivity. The government said Bitcoin will spur economic growth and help to stabilize the war-wracked country.

The central bank’s condemnation adds to criticism from the International Monetary Fund, which said the CAR’s decision raised major legal and transparency concerns.

Tolli asked Ndoba, who heads of the monetary union’s administrative board, to call an emergency meeting on May 5 and 6 to discuss the matter with other board members and ministers. A communications officer for the regional banking regulator said Tuesday that the meeting hadn’t taken place.