A few months after El Salvador legalized Bitcoin, the Central African Republic also decided to take the plunge and adopt cryptocurrency as an official currency. Knowing that only a tiny part of the population has access to the Internet, financial experts are skeptical of this decision.

Contents

  • Open new opportunities for the country
  • Concerns of experts and some members of the government
  • A risk of exclusion from the CFA zone

Open new opportunities for the country

The Presidency of the Central African Republic announces in a press release that Parliament has unanimously passed a bill legalizing the use of cryptocurrency . This makes the country the first African nation to adopt Bitcoin as its official currency and the second in the world after El Salvador. 

Some analysts speak of a last-ditch attempt to solve the country’s current fiscal problems . The government for its part describes this promulgation as a “ decisive step towards opening up new opportunities for the country”.  

The CFA franc, the regional currency governed by the Bank of Central African States (BEAC), is the official currency of the Central African Republic, to which is now added Bitcoin.

Concerns of experts and some members of the government

A person close to the government affirms that the president is convinced of the advantages brought by this novelty. This decision will make it possible to improve the conditions of his fellow citizens . Others are more worried, even skeptical. 

Former ministers have clearly expressed their concern about this initiative. Financial experts also doubt this, pointing to the fact that only a minority of the population (less than 5%) have access to the Internet. 

Hard to believe, they say, that the Central African Republic can adopt Bitcoin as its official currency along with the CFA franc. This may be a strategy to attract investors who are moving around cryptocurrency 

A risk of exclusion from the CFA zone

The promulgation of this law by President Faustin Archange Touadéra arouses controversy, but the government wants to be reassuring . Justin Gourna-Zacko, Central African Minister for the Digital Economy, Posts and Telecommunications, assures that this decision is in accordance with the laws which govern the country’s finance . 

An official of the Central Bank of Central African States (BEAC) nevertheless declares that “The Law passed on April 22, 2022 in the CAR is null and void, insofar as it violates the texts of the Monetary Union in Africa (UMAC) to which the country adheres”. 

Abebe Aemro Selassie, director of the IMF’s African department for his part, calls for caution. He expresses the need for a solid legislative framework for the use of cryptocurrency. Financial transparency is also essential in this context, he adds.

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