The governor of the Bank of Central African States (BEAC) has penned a scathing letter to the Central African Republic (CAR) regarding its decision to embrace bitcoin and other cryptocurrencies.
The Governor of the BEAC, Abbas Mahamat Tolli, wrote a letter to CAR Finance Minister Hervé Ndoba, saying that the “devastating” economic effects of the Central African Republic adopting crypto would be enormous.
Warnings on Central African Republic decision
With the country’s economic viability on the line, it comes as no surprise that the International Monetary Fund (IMF) has already condemned the decision. However, with this latest move by the BEAC, things are only going to get worse.
It adds that the use of cryptocurrency in the Central African Republic and a possible shift away from the CFA currency are “disconcerting.”
Naturally, the BEAC governor is eager to adhere to the CFA. He knows how troublesome it is for CARs to result in the adoption of bitcoin (BTC) and other Cryptocurrencies.
“This legislation’s major goal is to establish a Central African currency that would compete with or displace the fiat money adopted in CEMAC and jeopardize monetary stability, according to its terms,” the letter states.
The brief claims that the law’s main aim appears to be establishing a Central African currency “beyond the control” of the BEAC and that it can be analyzed as a threat to the French colonial monetary system.
Astonishing growth of crypto users in Africa
Despite economic challenges and headwinds, cryptocurrency adoption in Africa is growing rapidly. According to a good report by cryptocurrency exchange KuCoin, crypto transactions increased by up to 2,670% in 2022.
The pattern of growth has been breathtaking, with a rapid increase resulting from the low values that were previously recorded. The quantity of crypto transactions in Africa is around 2.8% of worldwide volumes.
According to the study, “more than 88.5 percent of cryptocurrency transactions made by Africans are cross-border transfers.” Users pay less than 0.01% of the overall amount of the transaction transferred in cryptocurrencies because of low fees.
Africa is home to a digitally native and tech-savvy generation that is well accustomed to digital currencies, which helps explain why the continent has always had a strong interest in them. Africa serves as an excellent testing ground for many of the issues cryptocurrencies are designed to solve.