CAR Adopts Bitcoin, IMF Optimistic Despite Liquidity Risks


IMF Optimism in Central African Republic

• The International Monetary Fund (IMF) projects 2.2% growth and manageable debt for the Central African Republic (CAR), despite the country’s recent adoption of Bitcoin as legal tender.
• CAR has made strides to enter the world of cryptocurrencies through its Sango Project, however, listing Sango Coin on exchanges has been delayed due to legal and regulatory obstacles.
• The IMF report highlights potential liquidity risks due to shortfalls in donor support and challenges accessing domestic and regional markets.

GDP Growth Forecasted

The International Monetary Fund (IMF) has expressed optimism about economic prospects in the Central African Republic (CAR). In a report, the IMF projects a rebound in real gross domestic product (GDP) growth to 2.2% for 2023, attributed to factors such as base effect and policy adjustments leading to enhanced fuel supply. Additionally, an average inflation rate of 6.3% is anticipated for 2023.

Public Debt Remains Sustainable

Despite being one of the poorest nations in the world, CAR is embracing digital currencies as a way of reshaping its financial infrastructure and boosting its economic prospects. The IMF also anticipates that public debt will remain sustainable – though there are significant liquidity risks indicated by relevant debt indicators arising from potential shortfalls in donor support and challenges accessing domestic and regional markets.

Sango Project Delays Listing on Exchanges

Following approval of Bitcoin as legal tender in CAR, the government launched an initiative called Sango Project marking its entry into digital currencies’ sphere. However, listing Sango Coin on crypto exchanges was delayed due to prevailing market conditions and marketing considerations – with further delays expected “just for few weeks” due to legal/regulatory obstacles in January 2023.

Government Task Force Working On Amendments

A government task force is actively working on legal amendments necessary for smooth integration of cryptocurrency into Central African Republic’s economy – according to information revealed by Sango Project earlier this year. With these amendments being implemented soon, it remains to be seen whether or not they will help boost economic growth projections in the near future