Central Africa’s regional banking regulators sent out a reminder on Friday about its ban on cryptocurrencies, weeks after the Central African Republic, a member state, made bitcoin legal tender.
The Banking Commission of Central Africa (COBAC), which regulates the banking sector in the six-nation Economic and Monetary Community of Central Africa (CEMAC), said the prohibition was meant to ensure financial stability.
The announcement came as cryptocurrencies nursed significant losses on Friday after the collapse of TerraUSD, a so-called stablecoin, rippled through markets.
The Central African Republic’s presidency announced on April 27 that bitcoin had been made legal tender, making it only the second country to do so after El Salvador.
Analysts and crypto experts said they were puzzled by the move in one of the world’s poorest nations where internet use is low; conflict is widespread and unreliable electricity.
The government has provided few details about its reasoning and questions remain about implementation.
Reached by phone on Friday, government spokesman Serge Ghislain Djorie told Reuters that the Central African Republic had received no official notice from the COBAC about a crypto ban, although he had seen the news in the press on social media.
“We are waiting for the document to be officially transmitted before responding. It must be understood that each state has sovereignty,” Djorie said.
The banking commission held a special meeting on May 6 to examine the impact of cryptocurrencies in the zone, it said in the statement on Friday.
“To guarantee financial stability and preserve client deposits, COBAC recalled certain prohibitions related to using crypto-assets in CEMAC,” it said.
These include the holding of cryptocurrencies of any kind, the exchange, conversion or settlement of transactions relating to cryptocurrencies, and a bar on them being used to evaluating assets or liabilities.
“COBAC has decided to take several measures to set up a system for identifying and reporting operations related to cryptocurrencies,” it added.