In a surprising move, the Central African Republic has become the first African nation and second country worldwide to adopt Bitcoin as a recognized currency.
The landlocked nation of the Central African Republic (CAR) has become one of only two countries to adopt the cryptocurrency Bitcoin as legal tender, joining El Salvador in pioneering recognized use. While not criminalized in most nations, few countries have introduced and published regulations to govern Bitcoin\s use and normalize it alongside fiat currency.
“[this is] a decisive step toward opening up new opportunities for our country,” said a statement signed by Obed Namsio, Chief of Staff to CAR President Faustin-Archange Touadera.
The former French colony of the CAR only gained its independence late in the 1960s and has been wracked by an ongoing civil war since 2012. While rich in natural resources such as gold and diamonds, the country ranks amongst some of the worst in the world in terms of its GDP and internationally recognized development indices, which makes the supposed adoption of Bitcoin an interesting proposal.
Early reports indicated that the proposed bill to legalize and regulate bitcoin as legal tender has passed unanimously in a vote by lawmakers and was confirmed by the Presidency yesterday, bringing Bitcoin alongside the West African Franc as recognized tender. The West African Franc is a regional currency governed by the Bank of Central African States (BEAC) and backed by France, neither of whom were reported to be informed of the bill to adopt Bitcoin.
The BEAC has not yet responded to queries from FORBES AFRICA.
Reports are that the utility of such an adoption is likely to be limited. Just over 4% of CAR nationals have access to the internet (World Bank, 2019), a prerequisite for cryptocurrency exchange. The combination of lack of accessibility and discussion with BEAC before the adoption does not bring high hopes for widespread use of Bitcoin within the country.
Since the election of President Touadera, CAR has reportedly become increasingly close to Russia, its preferred ally in fighting the ongoing insurgency since 2017. The adoption of Bitcoin could represent a more symbolic move away from French interests within the country, as it equates as tender the French-backed West African Franc and Bitcoin.
African governments have taken differing approaches to the adoption and regulation of cryptocurrencies, with South African regulators currently exploring blockchain technologies and already taxing earnings through cryptocurrencies, while Nigeria has launched its own digital currency, the eNaira.