Bitcoin is now legal in Central African Republic
The Central African CFA franc. The Central African Republic has become the world’s second country to adopt bitcoin as its official currency, following El Salvador’s decision last year. According to a statement from the presidency, lawmakers in the CAR’s parliament voted unanimously to pass a bill legalizing bitcoin and other cryptocurrencies.
The Central African Republic (CAR) has become the second country to recognize Bitcoin as legal tender.
CAR is one of the poorest countries on the planet, but it is wealthy in diamonds, gold, and uranium.
It has been wracked by conflict for decades and is a close Russian ally, with Wagner Group mercenaries assisting in the fight against rebel forces.
According to a statement from the CAR presidency, lawmakers voted unanimously to make Bitcoin legal tender.
The move places CAR “on the map of the world’s most daring and visionary countries,” according to the statement.
Many economists, including the International Monetary Fund, have criticized El Salvador for becoming the first country to adopt Bitcoin as an official currency in September 2021, claiming that it increased the risk of financial instability.
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Others have expressed concerns that cryptocurrencies like Bitcoin could make it easier for criminals to launder money and that they are environmentally harmful due to their high energy consumption.
The internet is required to use any cryptocurrency, but according to the WorldData website, only 4% of people in CAR had internet access in 2019.
The country, like most other former French colonies in Africa, uses the CFA franc as its currency, which is backed by France.
Some see Bitcoin’s adoption as an attempt to destabilize the CFA, which is in the midst of a power struggle between Russia and France over the resource-rich country.
“Given systemic corruption and a Russian partner-facing international sanctions, the context does encourage suspicion,” French analyst Thierry Vircoulon told AFP.
The reaction in Bangui, the capital, was mixed.
According to economist Yann Daworo of BBC Afrique, it will make life easier because transactions can be made with smartphones and Bitcoin can be converted to any other currency.
“Businessmen will no longer have to carry suitcases full of CFA francs that must be converted into dollars or any other currency in order to make purchases abroad,” he said.
He also claimed that the CFA was not being used “for Africa’s benefit.” Those who see the currency as a relic of the colonial era are increasingly calling for its abolition in several countries, allowing France to maintain economic control.
However, computer scientist Sydney Tickaya believes the cryptocurrency’s adoption is “premature” and “irresponsible.”
“Internet access in the country is still underdeveloped, and Bitcoin is entirely reliant on the internet,” he said, adding that the CAR had more pressing issues such as security, education, and drinking water access.
Since its independence in 1960, the CAR has been engulfed in conflict.
The largely Christian country was taken over by Muslim rebels in 2013. To fight back, self-defense militias were formed, resulting in widespread massacres along religious lines.
Following the election of President Faustin-Archange Touadéra in 2016, the country began to shift its strategic alliance away from France and toward Russia.