The Central African Republic (CAR) has just passed a law that will make Bitcoin a legal tender in the country. It is the second country in the world to do so, following El Salvador last year.
“There’s a common narrative that sub-Saharan African countries are often one step behind when it comes to adapting to new technology,” said Finance Minister Herve Ndoba. “This time, we can actually say that our country is one step ahead.”
Even though the decision was unanimously voted by the lawmakers in its National Assembly, the adoption of Bitcoin seems a bit puzzling for the landlocked nation as the use of cryptocurrency requires an internet connection. As of 2019, just over 4% of the country’s 4.6 million population has access to the web, according to WorldData.
The government has yet to reveal any detail regarding the legal framework around the use of Bitcoin. The CAR, while rich in diamond and gold reserves, is one of the poorest countries in the world and has been rocked by an ongoing violent civil war over the past decade.
Just like with most other former French colony African countries, the CAR’s official currency is the France-backed CFA franc. French analyst Thierry Vircoulon told the AFP that the move could possibly be an attempt to undermine the CFA as Russia and France fight for influence over the resource-rich nation.
After El Salvador started embracing Bitcoin as legal tender, the International Monetary Fund (IMF) urged the Central American country to reconsider its decision due to major risks associated with the digital coin. Several other nations such as Panama and Ukraine have expressed interest in adopting cryptocurrency in the near future.
(Sources: BBC, Bloomberg, Blockworks.)
