After El Salvador and the Swiss city of Lugano, the Central African Republic (CAR) declared bitcoin legal currency. The approval was an astonishing unanimous vote by the Parliament.
After the decision, conflicting decisions surged. On one hand, President Faustin Touaderahad supported the bill, convinced that this decision makes CAR one of the boldest and most visionary countries and that this decision will improve the conditions of their citizens and open new opportunities for the country.
On the other hand, former prime minister Martin Ziguele complained and is willing to contest the law at the Constitutional Court considering it a “serious offense” because bitcoin was adopted without guidance and it seeks to get the Central African Republic out of the CFA franc, the currency backed by France and pegged to the euro.
In tandem with bitcoin becoming legal tender, the Parliament legalized the use of cryptocurrencies where electronic operations, online trade and commerce, transactions, and exchanges will be allowed without restriction whether carried out by natural or legal persons, private or public entities. Moreover, cryptocurrency exchanges will not be liable for tax.
It is the first country in the African continent to adopt bitcoin as legal tender and to provide an attractive framework for the arrival and development of the cryptocurrency industry, in an effort to improve the country’s financial infrastructure, facilitate transactions using mobile phones, and ultimately, seeking to give a breath to a country that has gone through a decade of civil conflict and that despite being rich in minerals, gold and diamond reserves, its population is among the poorest of the world.
Notwithstanding the attractiveness to become a crypto oasis for the African continent, concerns surge as CAR has closed ties with Russia, alongside the presence of Russian paramilitary forces in the country, such that the new legislation could serve Russia to circumvent the financial sanctions that were imposed after the invasion to Ukraine.
Unlike other African countries, for instance, South Africa, Nigeria, or Tanzania, that are looking for cryptocurrency regulation, it is undoubted that CAR adopted a much more open stance in which the challenge to come is to translate the newborn legislation into a generalized form of access, especially because by the end of the year 2020, the number of its internet users was 655.5 thousand out of 4.8 million inhabitants and mobile connections are at the reach of only 48% of the population.