Central African Republic legalizes the use of cryptocurrencies, adopting Bitcoin as its official currency. It is the first country to do so in Africa, and the second in the world.
Central African Republic: the second country in the world to adopt bitcoin
While El Salvador has been adopting Bitcoin as its official currency for almost a year, and is working on building its Bitcoin City, another country is turning to the use of cryptocurrencies. Indeed, a bill regulating the use of cryptocurrencies was adopted last week unanimously by the Parliament of the Central African Republic, said in a statement the Secretary General of the Presidency of the country.
The Central African Republic has also adopted bitcoin as its official currency, the presidency announced on April 27. The country thus becomes the first in Africa to make this decision, and only the second in the world, after El Salvador. In the words of the communiqué, this decision would put CAR“on the map of the world’s boldest and most visionary countries.
Indeed, on September 7, 2021, El Salvador had been the first country in the world to adopt bitcoin as a legal currency. From then on, the International Monetary Fund (IMF) had immediately denounced this decision, which, according to them, would be dangerous for the “financial stability, financial integrity and consumer protection.” “This step puts the Central African Republic on the map of the most courageous and visionary countries in the world,” says the country’s presidency.
The Minister of Digital Economy, Gourna Zacko, and the Minister of Finance and Budget, Calixte Nganongo, initiated and presented this bill, which is part of the country’s ” economic recovery and peace consolidation “ plan. According to the text of the law, these new transactions may be carried out “without restriction (…) by natural or legal persons, public or private”. The following are mentioned in particular: “online trading activities”, “all electronic transactions” or “tax contributions”. The law also provides that “cryptocurrency exchanges are not subject to tax.”
Central banks are concerned
However, Western central banks are concerned about the possible use of crypto-currencies in order to circumvent the sanctions imposed on Russia. Also, calls for international regulation of bitcoins are growing in the United States and Europe.
But the director of the Africa department of IMF Abebe Aemro Selassie is more optimistic: “Assuming a well-prepared move towards digitization and through the use of central bank digital currencies,” cryptocurrencies “can contribute to a more robust payment system,” he said during a press conference. Yet “simply adopting the ability to use bitcoin is something that needs to be monitored very, very carefully,” he continued. We need to make sure that the legislative framework, the financial transparency and the governance is in place.”
Apart from the Central African Republic and El Salvador, other countries are considering using bitcoin as a legal tender, some having initiated legislative processes in this direction, according to the specialized site CoinMarketCap . In addition, more local initiatives are multiplying. In addition, in early March 2022, the city of Lugano in Switzerland announced that it would accept BTC and stablecoin USDTpayments.