The Central African Republic, after El Salvador, is the second country in the world to adopt bitcoin as a reference currency (GETTY IMAGES NORTH AMERICA / Marco Bello)
The Central African Republic, the world’s second least developed country according to the United Nations, has adopted bitcoin as an official currency alongside the CFA franc and legalized the use of cryptocurrencies, the presidency announced on Wednesday, ensuring that it is the first country to do so. Do it in Africa.
The National Assembly voted “unanimously” by deputies on a law “governing cryptocurrency in the Central African Republic” and promulgated by President Faustin-Archange Touadera, confirmed in a press release by the Minister of State and Chief of Staff of the Presidency, Obed Namsiou, adding: The Central African Republic is “the first country in Africa to adopt Bitcoin as a reference currency.
On September 7, 2021, El Salvador was the first country in the world to adopt bitcoin as a legal currency, and the International Monetary Fund immediately denounced the decision as dangerous to “financial stability, financial safety and consumer protection.”
“This approach puts the Central African Republic on the map of the most courageous and visionary country in the world,” on the contrary, believes that the presidency of the Central African Republic, a country in a state of civil war since 2013.
Supporters of President Faustin-Archange Touadera, in Bangui, March 18, 2022 (AFP/Barbara DEBOUT)
At the end of 2020, the majority of armed groups that then occupied two-thirds of the territory launched an attack on the authority of President Touadera, who called on Moscow to help. Already in existence since 2018, Russian paramilitaries came as reinforcements alongside CAR soldiers to fend off the rebel attack.
But the United Nations, international NGOs and France, the former colonial power, regularly condemn the “crimes” committed by the “mercenaries” of the Russian private security company Wagner, as well as by the rebellion. He accused Mr. Touadera’s authority of placing the country under Wagner’s control, asserting that the latter “plunders” the country’s resources, especially precious metals.
“The context with systemic corruption and a Russian partner subject to international sanctions raises suspicion,” Thierry Vercolon, a specialist on Central African affairs at the French Institute of International Relations (IFRI), told AFP. “Russia’s search for ways to circumvent international financial sanctions calls for caution,” he added.
– Central bank fears –
According to the presidency, “the law was passed by acclamation,” but some members of the opposition “will attack the law before the Constitutional Court,” according to what was announced Wednesday to AFP by Martin Zigeli, the former prime minister who now holds the position of opposition deputy.
“This law is a way out of the CFA franc by emptying the common currency of its essence (…), it is not a priority for the country, this approach asks: who benefits from the crime?” , he completed.
A militia man at the entrance to the PK5 district in Bangui, November 15, 2017 (AFP/FLORENT VERGNES)
“The purpose of this law is to regulate all transactions related to cryptocurrency in the Central African Republic, without restrictions (…) carried out by natural or legal persons, public or private,” states the text referring in particular to “trade activities via Internet” or “all electronic transactions” or even “tax contributions”. The law also states that “cryptocurrency exchanges are not subject to tax.”
Bitcoin volatility can make you feel dizzy. In 2021, prices surged more than 150% to a record $68,991 before crashing by more than 30%.
Even if the market calms down in 2022, the differences remain very strong: -17% in February, +8% in March and +10% in April. On Wednesday, Bitcoin was trading at over $39,000.
At the moment, only El Salvador and the Central African Republic have adopted bitcoin as legal tender, but other countries are considering doing so, and some of them have begun legislative processes in this direction, according to the specialist Coinmarketcap.com.
In Ukraine, the government accepted cryptocurrency donations, raising more than $100 million in the early days of the conflict to fuel its war effort.
But Western central banks are also concerned about their potential use to circumvent sanctions against Russia and calls for international regulation are growing in the United States and Europe.
In addition, around the world, many countries are talking about the possibility of creating their own digital currency, which will be centralized.