Central African Banking Regulator COBAC Reinstates Crypto Ban Still Effective

Key Takeaways:

  • COBAC reminded CEMA members that the crypto ban is still effective.
  • The ban comes amidst the Central African Republic’s decision to adopt bitcoin as the country’s “currency of reference.”

An African financial regulator, the Banking Commission of Central Africa (COBAC), has reminded members of a regional economic bloc that its ban on cryptocurrencies remains in effect.

 The regional economic bloc includes the Central African Republic (CAR), which has recently decided to adopt bitcoin as the country’s “currency of reference.”Central African Republic’s presidency announced on April 27 that bitcoin had been adopted as legal tender, making it the second country to do so after El Salvador. The new development also comes at a time when the cryptocurrency market has been witnessing a tough time after the collapse of TerraUSD, touted to be a stablecoin, rippled through markets.

According to a Reuters report, COBAC, which regulates the banking sector in the six-nation Economic and Monetary Community of Central Africa (CEMAC), noted the crypto ban was meant to ensure financial stability. In a statement issued after it held a special meeting on May 6, the regulator also reportedly said it will further take steps to identify and report crypto-related transactions. The report noted that the ban on cryptocurrencies includes the holding of cryptocurrencies of any kind, the conversion, exchange, or settlement of transactions relating to cryptocurrencies, and a ban on them being used as a means of evaluating assets or liabilities.

The Bank of Central African States had also told the CAR to annul its decision to make bitcoin legal tender. The regional central bank said that instead of adopting bitcoin as legal tender the CAR should now focus on implementing the monetary policies of CEMAC to help reduce endemic poverty. The Reuters report also quoted Serge Ghislain Djorie, a spokesman for the CAR government, who stated that they had not received any official notice from the COBAC about the crypto ban, although he had seen the news in the new media and on social media. Djorie added that his government would soon issue a response once it is in possession of the COBAC document.

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Saniya Raahath

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