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Central African Republic approves Bitcoin

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Central African Republic approves Bitcoin

Lawmakers in the Central African Republic voted unanimously to pass a bill legalizing cryptocurrencies.

Bitcoin will be considered legal tender along with the Central African regional CFA franc.

The Central African Republic is the second country in the world to convert bitcoin into legal tender. El Salvador did so last year.

The Central African Republic has become the second country in the world to adopt bitcoin as its official currency, after El Salvador took the same step last year.

Lawmakers in the Central African Republic’s parliament voted unanimously to approve a bill legalizing bitcoin and other cryptocurrencies, according to a statement from the presidency.

Bitcoin will be considered legal tender along with the Central African regional CFA franc.

Obed Namsio, chief of staff to President Faustin-Archange Touadera, called the move “a decisive step towards opening up new opportunities for our country,” according to Reuters.

CAR is rich in diamonds, gold and other valuable minerals, but it is one of the poorest and least developed countries in the world.

About 71% of CAR’s 5.4 million people lived below the international poverty line in 2020, according to the World Bank. And only 11% of CAR’s population has access to the Internet.

The landlocked country in the heart of Africa has been mired in political instability and violence for years. 

Bitcoin

Bitcoin is a notoriously volatile asset, raising questions about its role as a standard payment method. The last time it traded was around $39,686 on Thursday, down 6% in the past 24 hours. The cryptocurrency has lost about 42% of its value since hitting an all-time high above $68,000 in November.

Many Western governments have sounded the alarm about Russia’s possible use of cryptocurrencies to evade sanctions amid the country’s invasion of Ukraine.

The Central African Republic is a close ally of Russia and, according to the UN, Russian mercenaries have provided direct assistance to the government.

 Experts suggested the move could help small countries like CAR reduce their dependence on the U.S. dollar for global trade.

Ransu Salovaara, CEO of cryptocurrency platform Likvidi, noted that the dollar has been the world’s oil currency since the 1950s. 

“Dependence on oil is a major issue now, because of Ukraine and the SWIFT banking ban, so unstoppable global cryptocurrencies like bitcoin can really shine,” he added.

Second country to adopt Bitcoin as legal tender

While countries like India have banned crypto transactions in the past, El Salvador became the first country to adopt Bitcoin as legal tender last September.

But El Salvador’s move was harshly criticized by the International Monetary Fund (IMF).

“However, the adoption of a cryptocurrency as legal tender carries great risks to financial and market integrity, financial stability and consumer protection,” he warned.

The Central African Republic is one of the poorest countries in the world and has been in the midst of a nine-year civil war that developed largely along sectarian lines.

In 2020, a coalition of rebels advanced toward the capital, Bangui, threatening to oust Touadera as new elections loomed.

Russia sent paramilitaries to help repel the threat and then retake much of the rebel-held territory.

The operatives are described by Bangui as military advisers, but by France, the UN and others as mercenaries of the Kremlin-backed Wagner group, which has been accused of abuses.