The World Bank has aired its concerns over the adoption of Bitcoin as legal tender in the Central African Republic. According to the World Bank, there were issues of transparency and financial effects caused by using Bitcoin as the official currency.
World Bank worries over use of BTC as legal tender
According to the World Bank, it will be “physically impossible” to finance the crypto adoption journey that the Central African Republic has started. The recent remarks by the institution are similar to what was said when El Salvador passed the Bitcoin law last year.
The World Bank has not supported any country using Bitcoin as legal tender. Last year, it said that El Salvador’s Bitcoin law posed a danger to the environment and financial transparency. It has aired similar concerns for the Central African Republic.
In a response given to Bloomberg, the World Bank said that “We have concerns regarding transparency and the potential implications for financial inclusion, the financial sector and public finance at large, in addition to environmental shortcomings.”
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In matters to do with transparency, the World Bank said that the Central African Republic government failed to consult the country’s central bank before adopting the Bitcoin law. The Bank of Central African States is in charge of its monetary policy, and it governs the Central African CFA franc. The World Bank has seen Bitcoin and other cryptocurrencies outside its purview.
The central African Republic attempts to grow the economy
Despite the concerns, the Digital Economy Minister for the Central African Republic, Justin Gourna Zacko, said that cryptocurrencies can be used to bypass the control that the central bank has over international money transfers.
In El Salvador, the adoption of Bitcoin was fuelled by the lower remittance fees. The same reason has also been given in Tonga. The Central African Republic also unveiled the Sango platform to create the digital infrastructure needed to adopt the digital yuan.
The country is also planning to create a custom digital wallet that integrates Bitcoin’s Lightning network. The wallet will be similar to El Salvador’s Chivo wallet, which supports instantaneous Bitcoin transfers and facilitates the automatic conversion of payments into dollars upon request.
The World Bank has also said it would not support the initiative, saying that the recent $35 million loan would boost the existing financial system in the country. However, the president has insisted that focusing on the “formal economy” was not an option.
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