Bitcoin is now official currency in Central African Republic

The Central African Republic (CAR) has become the second country to approve Bitcoin as a legal tender, BBC News reported.

A statement released by the CAR presidency said members of the law-making body voted unanimously to adopt a bill that would make Bitcoin a legal medium of exchange.

It added that the decision has put the CAR “on the map of the world’s boldest and most visionary countries.”

The CAR’s decision follows El Salvador, which became the first country to allow consumers to use Bitcoin in all transactions last year, alongside the US dollar.

Like many former French colonies in Africa, the CAR currently uses the CFA franc as its medium of exchange, and many are suspicious of the motives behind its move to Bitcoin.

“The context, given the systemic corruption and a Russian partner-facing international sanctions, does encourage suspicion,” French analyst Thierry Vircoulon told the Agence France-Presse news agency.

Others have also criticised the decision, including the International Monetary Fund, which said the move invites an increased risk of financial instability.

Among the concerns are that cryptocurrencies such as Bitcoin are volatile.

Regulators and economists have raised fears that cryptocurrencies introduce opportunities for criminal activities such as money laundering and tax evasion.

Proponents of cryptocurrencies counter that regular cash remains criminals’ favoured tool for such financial crimes.

Some have responded optimistically to the decision, as Economist Yann Daworo informed BBC Afrique that, “it would make life easier, as transactions can be made with smartphones, and it is easy to convert Bitcoin to any other currency.”

However, access to the internet in the country is also a notable concern. According to WorldData, only 4% of CAR citizens had access to the internet in 2019.

Whatever impact this decision will have on the CAR remains to be seen, but some say it’s a sign that the country is shifting its allegiance from France to Russia, according to BBC News.

Main Image: Forbes