A well-regulated African cryptocurrency market It is necessary not only to protect users but also to help countries stop bad actors from using their digital assets to circumvent capital controls, according to the latest post on the IMF blog. It reiterated the IMF’s belief that “the risks to a country are much greater if cryptocurrencies are adopted as legal tender.”
Cryptocurrency volatility is said to lead to improper store of value
The collapse of the cryptocurrency exchange FTX and the subsequent downturn in the cryptocurrency market It re-emphasizes the need for better regulation of the industry. The International Monetary Fund (IMF) said in its latest blog post: Urgent action is also needed to block or stop bad actors from using cryptocurrencies to facilitate illegal activities in Africa, where the crypto market is growing rapidly, according to the blog.
According to the global lender’s latest blog post, only a quarter of her countries in sub-Saharan Africa formally regulate cryptocurrencies. But the Bretton Woods Institute’s latest post, known as “Chart of the Week,” says more than two-thirds of her countries in the region have implemented some kind of restriction.
Only six countries—Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of the Congo—have effectively banned cryptocurrencies, a blog reveals. Meanwhile, Zimbabwe has instructed its banks to stop processing crypto-related transactions.
Although the author of a November 22 blog post acknowledged that “many people use cryptocurrencies for commercial payments,” the volatile nature of cryptocurrencies argued that it was inappropriate for an alternative store of value.
Widespread use of cryptocurrencies could undermine “monetary policy effectiveness”
In addition to volatility, The authors argued that policymakers in Africa were concerned
They also used cryptocurrencies to illegally transfer funds out of the region and I am concerned that there is a possibility of sending money by circumventing the rules of Prevent capital outflow. Widespread use of crypto could also undermine the effectiveness of monetary policy and create risks to financial and macroeconomic stability.
Regarding the Central African Republic (CAR), which has already issued a Bitcoin legal tender, the authors argued that such a decision would “endanger public finances,” according to his IMF repeated the belief of The move by CAR also violates the Central African Economic and Monetary Community (CEMAC) Treaty on Cryptocurrencies.
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