The Central African Republic (CAR) decided to be the first country in Africa to recognize Bitcoin as legal tender. This means that one of the poorest states in the world is following the example of El Salvador, with the current president hoping for new prosperity for the country.
A few days ago, Forbes Monaco was the first media to report the news. The article caused a stir in the crypto world, but no other major media picked up the story. In fact, no other sources could be found on the topic and voices regarding fake news grew louder. However, a few days later, the president of the Central African Republic himself spoke out and confirmed the adoption of Bitcoin as a means of payment.
Bitcoin as legal tender in the CAR
Lawmakers unanimously passed a bill making Bitcoin legal tender alongside the CFA franc and legalizing the use of cryptocurrencies. President Faustin Archange Touadera already signed the measure into law, his cabinet chief Obed Namsio said in a statement.
"The Central African Republic is the first country in Africa to designate Bitcoin as legal tender. This move puts CAR on the map of the most courageous and visionary countries in the world." - Cabinet Secretary Obed Namsio
The text of the new legislation covers the use of cryptocurrencies in online trading, the use of smart contracts, blockchain technology, and "all electronic transactions." In addition, cryptocurrency trades would not be subject to tax. Overall, the approach is very similar to that of the South American state of El Salvador.
A way out of the crisis?
The Central African Republic is one of the poorest and most crisis-prone countries in the world, embroiled in a nine-year civil war and with an economy heavily dependent on mineral extraction. Since its independence from France in 1960, the state has experienced few moments of peace and ranks 188th out of 189 countries in the UN Human Development Index.
Until now, the Central African Republic has used the CFA franc - a regional currency backed by France and pegged to the euro - as its primary means of payment. According to the opposition, this was an illegitimate attempt to break away from the influence of Western currency. The law was passed "by proclamation," and some MPs are planning to challenge it in the constitutional court, according to Martin Ziguele, a former prime minister of the Central African Republic and now an opposition MP.
"This law is an attempt to get rid of the CFA franc in a way that erodes the ordinary currency. The law is not a priority for the country. This move raises the question: Who benefits?" - Martin Ziguele, opposition deputy
