Cryptocurrencies have created a storm in the financial sector. Most people have adopted it with open arms and a few countries have also made it legal. The latest country to adopt Bitcoin as a legal tender is the Central African Republic. The first nation to adopt this practice was El Salvador.
President Faustin Archange Touadera’s office announced on Wednesday that the measure is no law. Based on the bill, the use of bitcoin or any other cryptocurrencies will be considered a legal form of transaction for payments along with the CFA franc.
According to Agence France- Presse, while presenting the bill, Touadera’s chief of staff. Obed Namiso said that the Central African Republic is the first country on the continent to adopt bitcoin as a legal currency. He further added that this makes the Central African Republic one of the world’s boldest and most visionary countries.
Legislators approved the bill that allows cryptocurrencies to be used in online trade as well as electronic transactions. At the same time, exchange will not be subject to taxes.
The Central African Republic is a developing country and has a population of approximately 5 million. It is rich in mineral deposits and other natural resources but it still faced economic and humanitarian challenges in the past decades.
Thus, the move of the nation into cryptocurrencies is one of the nation’s latest efforts to improve its financial structure.
Although, the new bill did not go well with everyone, including former Prime Minister Martin Ziguele, who is now a member of the opposition wing. He had concerns and raised the issue that the law was passed “by proclamation”. He further added that some legislators plan to fight the bill in the constitutional court. He even feels that the law is working towards undermining the CFA franc which is the country’s currency.
As per the AFP, he also added that the law isn’t a priority for the country. This move also raises an important question, “Who will benefit from it?”
It is worth noting that the Central African Republic is one of the six African countries that share the CFA franc which is a regional currency backed by France and fixed to the Euro. The other countries that share this currency are Chad, Cameroon, Gabon, the Republic of Congo, and Equatorial Guinea.
El Salvador and Cryptocurrency
This country was the world’s first adopter of the pioneering virtual currency. After the bill passed, the citizens of the Central American countries were allowed to use the digital currency with US dollars for transactions and payments.
This move was criticized by the International Monetary Fund (IMF). The association warned them of the large risks of financial instability that were associated with Bitcoins. They even shed light on the problems of financial integrity, consumer protection, and bitcoin-backed bonds.
Thus, there are a lot of discussions around keeping virtual assets safe and increasing the storage amount along with taxes and regulations as digital currencies are expanding globally. Based on a report from Brookings Institute, there are a lot of African countries like Nigeria, South Africa, and Kenya that have growing cryptocurrency markets. It seems like the Central African Republic is just joining that race.