It has been suggested that the volatility of cryptocurrencies makes them unsuitable for use as a store of value.
According to the most recent entry in the blog of the International Monetary Fund (IMF), the failure of the cryptocurrency exchange FTX and the subsequent decline in the price of cryptocurrencies have once again brought into focus the urgent need for improved regulation of the industry. According to the blog, urgent action is required in order to block or stop bad actors from using crypto assets to facilitate illegal activities in Africa, where the crypto market is rapidly growing. This is necessary in order to prevent illegal activities from being facilitated.

According to the most recent blog post published by the international lender, just one quarter of the nations in the sub-Saharan area of Africa explicitly regulate cryptocurrencies. On the other hand, according to the most recent entry in the "Chart of the Week" series of posts published by the Bretton Woods Institution, more than two-thirds of the countries in the region have instituted some restrictions.

According to the findings of the blog, crypto has been effectively banned in only six countries: Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of the Congo. On the other side, Zimbabwe has ordered its banks to cease processing any transactions connected to cryptocurrencies.

The authors of the blog post that was published on November 22 did acknowledge that "many people use crypto assets for commercial payments," but they insisted that due to the volatile nature of crypto assets, using them as an alternative store of value is not a good idea.

A more widespread use of cryptocurrencies poses a threat to the so-called "effectiveness of monetary policy."
In addition to the market volatility, the authors asserted that African policymakers are concerned that crypto assets are being used to circumvent countries' respective exchange and capital controls, citing the following:

Policymakers are also concerned about the possibility that cryptocurrencies could be used to facilitate the illegal transfer of funds outside of the region and to evade local regulations designed to prevent the loss of capital. The widespread usage of cryptocurrencies may also reduce the efficiency of monetary policy, which might create dangers for the stability of the financial system and the economy as a whole.

Regarding the Central African Republic (CAR), which has already made bitcoin legal tender, the authors restated the belief of the International Monetary Fund (IMF) that a decision like this places "public finances at risk." The Central African Republic's action is also in violation of the cryptocurrency treaty ratified by the Economic and Monetary Community of Central Africa (CEMAC).

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