The Central African Republic (CAR) has become the second country to recognize Bitcoin as legal cash.
Bitcoin: CAR is one of the poorest countries on the planet, but it is wealthy in diamonds, gold, and uranium. It has been devastated by conflict for decades and is a staunch Russian ally, with Wagner Group mercenaries assisting in the fight against rebel troops. According to a statement from the CAR presidency, lawmakers agreed overwhelmingly to make Bitcoin legal tender.
The decision places CAR “on the map of the world’s most daring and visionary countries,” according to the statement.
Many academics, including the International Monetary Fund, have criticized El Salvador for being the first government to adopt Bitcoin as an official currency in September 2021, claiming that it increased the risk of financial instability.
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 utilize any cryptocurrency, however according to the WorldData website, only 4% of people in CAR have 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 perceive Bitcoin’s acceptance as a ploy to destabilize the CFA, which is in the midst of a power struggle between Russia and France over the resource-rich country.
“The context, given the systemic corruption and a Russian partner facing international sanctions, does encourage suspicion,” French analyst Thierry Vircoulon told the AFP news agency.
The reaction in Bangui, the capital, was varied. According to economist Yann Daworo of BBC Afrique, it will make life easier because transactions can be performed using cellphones and Bitcoin can be converted to any other money.
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