Having followed El Salvador’s acceptance of Bitcoin as a national currency last year, the Central African Republic (CAR) has become only the second country in history to adopt bitcoin as a national currency.
According to Reuters and BBC News, the Central African Republic’s government has announced that a law to legalize Bitcoin has been voted unanimously by the country’s parliament. While previous CAR Prime Minister Martin Ziguele expressed dissatisfaction with the measure, it was adopted “by proclamation.” The president of the Central African Republic, Faustin-Archange Touadera, stated that the action would “better the conditions of Central African citizens” and differentiate the country as “one of the world’s boldest and most visionary nations.”
Geopolitical specialists and financial experts, on the other hand, are perplexed as to the rationale for the decision. The Central African Republic (CAR) is a landlocked country that is rich in natural resources such as gold and uranium, but it remains one of the world’s poorest countries. As a result of the civil strife that has engulfed the country since 2012, only 11 percent of the 4.8 million-strong population has access to the internet. In Africa, it is one of six countries that uses the Central African CFA franc as its currency, according to the legal firm Baker McKenzie, which describes it as “a regional currency that is guaranteed by France and pegged to the Euro.”
This is a gigantic middle finger to the French economic system, according to the author.
It has been speculated that the Central African Republic’s adoption of Bitcoin is an attempt to weaken the CFA franc and send a message to the country’s former colonial power, France. In the words of Chris Maurice, CEO of cryptocurrency exchange Yellow Card, which caters primarily to users in Africa, “it’s a gigantic middle finger to the French economic system.”
Others speculate that the decision may be linked to the CAR’s tight ties with the Russian Federation. The Central African Republic was one of just a few countries to abstain from a United Nations vote condemning Russia’s invasion of Ukraine, and the country’s leadership has been criticized for using mercenaries from Russia’s Wagner Group to combat rebel groups in the country’s interior.
“Given the systemic corruption and the fact that Russia is a partner that is subject to international sanctions, the context does inspire suspicion,” said Thierry Vircoulon, an analyst with the French Institute of International Relations, according to the AFP news agency (via BBC News).