MF condemns usage of bitcoin by countries, as CBDC adoption

The International Monetary Fund (IMF) has tackled countries looking to bitcoin as solution to their economic problem, after Central African Republic adopted the cryptocurrency this week.

The growing usage of bitcoin among peer-to-peer and exchange channels has began to lure some countries into considering it as a legal tender, rather than issuing government regulated digital currency.

Ripples Nigeria had reported on Monday that Central African Republic adopted bitcoin as it’s legal tender, eight months after El Salvador became the first country to officially approve it for payment.

Nine countries, including Nigeria, have launched Central Bank Digital Currency (CBDC), but adoption has been slow against expectations, as 35 countries have been considering a CBDC since 2020, out of 87 exploring the idea.

While the number of countries using bitcoin as legal tender is less, compared to CBDC, this is enough to worry the IMF, as its director for African department, Abebe Selassie, cautioned the adoption of the former by governments.

During a press conference on the outlook for Africa’s economy on Thursday, Selassie said governments shouldn’t navigate their way out of economic challenges with bitcoin.

“it’s really important to not see such things as a panacea for economic challenges our countries face” Selassie said, adding that, “You have to make sure that the legislative framework, in terms of the transparency of financial flows, the governance framework around it is all robustly in place.

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