The official Twitter page of AFP News Agency yesterday (April 27) announced that the Central African Republic (CAR) adopts bitcoin as legal currency, making it the first country in Africa and only the second in the world to do so.
A bill governing the use of cryptocurrency was adopted unanimously by parliament last week, said a statement signed by Obed Namsio, chief of staff of President Faustin-Archange Touadera. “The president supports this bill because it will improve the conditions of Central African citizens,” Namsio told Reuters, without elaborating. In the statement, he called it “a decisive step towards opening up new opportunities for our country”.
CAR is one of the world’s poorest countries but is rich in diamonds, gold and uranium. Lawmakers voted unanimously to adopt Bitcoin as legal tender, said a statement from the CAR presidency. The move puts CAR “on the map of the world’s boldest and most visionary countries”, it said.
The country currently uses the French-backed CFA franc as its currency, along with most other former French colonies in Africa. Some see the adoption of Bitcoin as an attempt to undermine the CFA, amid a contest for influence over the resource-rich country between Russia and France.
Making Bitcoin a legal currency of CAR is a risky decision when the digital currency market is still restricted in many countries and still contains many potential risks such as payment methods, hackers potentially intrusive or criminal forms of money laundering.
El Salvador became the first country in the world to adopt Bitcoin as legal tender last year, but the roll-out was hampered by scepticism and it postponed a proposed Bitcoin bond in March amid global market turmoil.
Under it, citizens of the Central American country were allowed to use the digital currency- along with the US dollar which has been the official currency for two decades- to pay for any goods or service, using a cyber wallet app. The introduction was heavily criticized by the International Monetary Fund (IMF).
South African regulators have been exploring the potential regulation of cryptocurrencies and other blockchain technology, and Tanzania’s central bank said last year that it was working on a presidential directive to prepare for cryptocurrencies.
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