Benin Takes Decisive Action to Protect CFA Franc: Refusal of Legal Tender Now an Offense
Porto-Novo, Benin – November 5, 2025 – In a move signaling a significant shift in monetary policy, Benin’s Council of Ministers, under the leadership of President Patrice Talon, has approved a bill designed to aggressively combat counterfeiting and, crucially, the widespread practice of refusing to accept worn or crumpled CFA Franc banknotes and coins. This breaking news has the potential to reshape commercial transactions and restore public trust in the region’s currency.
Beyond Counterfeiting: Addressing a Deep-Rooted Problem
While the fight against counterfeit currency is a global concern, Benin’s new legislation tackles a uniquely persistent issue: the arbitrary rejection of perfectly legal tender based on its physical condition. For years, merchants, transporters, and even individuals have routinely refused banknotes deemed “too old,” “smooth,” or “crumpled,” despite repeated warnings from the Minister of Finance. This practice, often dismissed as a minor inconvenience, has subtly eroded confidence in the CFA Franc (XOF), the bedrock of trade in Benin and several other West African nations.
The bill, now headed to the National Assembly for debate and a vote, expands the definition of “attacks on monetary signs” to explicitly include this refusal of acceptance. This isn’t simply about aesthetics; it’s about upholding the CFA Franc’s “power of discharge” – the legal obligation for creditors to accept the currency for settling debts.
What Does the Law Say?
Under the proposed law, refusing a valid CFA Franc note or coin solely because of its wear and tear will be considered a punishable offense. The legislation clarifies that only banknotes or coins that are “mutilated” to the point of being unrecognizable are exempt from acceptance. Furthermore, the bill extends to criminalizing the possession of counterfeit currency, altering genuine notes (through writing, tearing, or burning), and even knowingly retaining a counterfeit note after discovering its falsity. This represents a significant escalation from previous policies focused solely on awareness campaigns.
The CFA Franc & Regional Stability: A Deeper Look
The CFA Franc, issued and guaranteed by the Central Bank of West African States (BCEAO), plays a vital role in the economic stability of the West African Economic and Monetary Union (WAEMU). Its integrity is paramount. Historically, concerns about the CFA Franc have centered around its fixed exchange rate with the Euro and its perceived colonial ties. However, this new legislation addresses a more immediate, grassroots issue impacting daily transactions.
Evergreen Insight: The CFA Franc has been a subject of ongoing debate regarding its future. Some economists advocate for a more flexible exchange rate or even the adoption of a new, independent currency for West Africa. However, for the foreseeable future, the CFA Franc remains the dominant currency in the region, making its protection a critical priority for member states like Benin.
Protecting Public Confidence: A Shift in Approach
Benin’s government is clearly signaling a zero-tolerance policy for any behavior that undermines the CFA Franc. This move from mere recommendation to legal repression demonstrates a commitment to safeguarding the currency’s value and ensuring the smooth functioning of commercial exchanges. The broad definition of “other attacks on currency signs” is particularly noteworthy, encompassing a wide range of actions that could potentially damage public trust.
Practical Implications: Businesses in Benin should review their internal policies regarding currency acceptance to ensure compliance with the new law. Training staff to recognize valid, albeit worn, CFA Franc notes and coins will be crucial. Consumers should be aware of their rights and report any instances of illegal currency refusal.
This decisive action by Benin underscores the importance of a stable and trusted currency for fostering economic growth and regional integration. By tackling both counterfeiting and the everyday rejection of legal tender, the country is taking a proactive step towards strengthening its financial system and protecting the interests of its citizens. The outcome of the National Assembly vote will be closely watched, not only in Benin but across the WAEMU region, as a potential model for safeguarding monetary integrity.
