Central Africa's regional banking regulator warned its member states last Friday that cryptocurrencies are banned, after a few weeks after the Central African Republic (CAR) made bitcoin legal.
According to information from Reuters, the memo came into a chaotic week for cryptocurrencies, after the linked collapse of the algorithmic stablecoin UST and Terra’s Luna asset resulted in heavy losses for many involved. This also led to Terra blockchain outages and market outages as Luna's circulating supply soared.
CAR President Faustin Archange Touadera signed a law on April 27 legalizing cryptocurrencies and making the bitcoin a recognized currency in the country after a unanimous parliamentary vote, becoming the second country to adopt bitcoin, after El Salvador did so last year.
Obed Namsio, CAR president's chief of staff, said the move is an important milestone for the country's economic recovery, according to a post on the government's official Facebook page.
Still, the Central African Banking Commission (COBAC), which is responsible for regulating the banking sector in the Central African Economic and Monetary Community (CEMAC), to which CAR belongs, said its ban aims to ensure financial stability.
Government spokesman Serge Ghislain Djorie told Reuters that the Central African Republic has not received any official notice from COBAC about the cryptocurrency ban, even though it has seen the news in the press and on social media.
We are waiting for the official transmission of the document so that we can respond. It must be understood that each state has its sovereignty”, commented Djorie.
It is worth remembering that the banking commission held a special meeting on May 06th to examine the impact of cryptocurrencies in the zone. “To ensure financial stability and preserve customer deposits, COBAC has recalled certain prohibitions related to the use of cryptocurrencies at CEMAC,” the document pointed out.
