There are suspicions that the only state along with El Salvador, to have done so is immediately suspected of wanting to promote dubious transactions, at a time when the regime is under fire from the UN. In response to the adoption of Central African Republic (CAR) of Bitcoin (BTC) as legal tender, several financial specialists in Africa have raised a number of questions.
At a time when the regime is under pressure from the United Nations, there are suspicions that the only state to have adopted Bitcoin, along with El Salvador, is attempting to encourage fraudulent transactions, according to analysts in a report by Africanews on May 5.
Moscow has been under international economic sanctions since the invasion of Ukraine and Bangui has complained constantly about a UN arms embargo since 2013.
On 28 April, President Faustin Archange Touadéra made the surprise announcement that the parliament of this very poor central African country had passed a law “governing all transactions” in cryptocurrencies and making bitcoin a “reference currency” alongside the CFA franc.
In front of one of the city’s few ATMs, the legalisation of Bitcoin is puzzling.
“What is it?” asks Sylvain, in his 30s, in the queue. “I don’t know what crypto-currencies are, I don’t even have internet,” laughs Joelle further on in front of her small vegetable stall.
“We will educate the population and soon move to fibre optics and a weak internet connection is enough to buy cryptocurrency,” government spokesman Serge Ghislain Djorie assured AFP.
“While bitcoin may facilitate some transactions, it is a strange choice as a regular means of payment” in such a country, says Ousmène Jacques Mandeng, a professor at the London School of Economics and Political Science.
States that adopt another currency generally choose a more stable currency than their own (US Dollar, Euro), as the price of bitcoin is extremely volatile.
Notably, after CAR’s adoption of Bitcoin, the main digital asset’s price has fallen below $34,300. According to CoinCu statistics, the asset is now trading this level, down 4.09% on the day but down 9.55% in the previous week.
“There is currently a process for a concerted framework between the six countries of the Economic Community of Central African States (CEMAC), the anti-money laundering authorities and regulators to legislate on cryptocurrencies,” but “we have not been notified by Bangui of its decision,” said Didier Loukakou, director of regulation at the Central African Financial Market Supervisory Commission (Cosumaf).
It is entirely reasonable for financiers to doubt that Bitcoin becomes the currency of CAR and its far-fetched application, as its popularity and practicality remain unconfirmed.
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