Bitcoin arrival in Africa

Cryptocurrencies are also invading the heart of Africa: the Central African Republic is actually the second national country after El Salvador to adopt bitcoin as its official currency alongside the CFA franc. Yesterday the National Assembly voted unanimously on the law governing cryptocurrency in the former French colony: “This move puts the Central African Republic on the map of the most courageous and visionary country in the world,” said President Faustin-Archange Touadera. Certainly the bold words, as Central Africa, in addition to being in the midst of a civil war for nearly a decade, is considered by the United Nations to be the second least developed country in the world.

The reform, arising from a joint proposal by the Minister of Digital Economy and the Minister of Finance of Bangui, provides for the acceptance of cryptocurrencies as a legal payment within the entire republic, even if it is not clear at the moment how and when the ruling will come into force. Touadera only said that the government “will make all necessary efforts to support the process of adopting the new currency.” An ambitious and pioneering move in some ways, but one that inevitably collides with the poverty prevailing in the equatorial state, where most citizens live on less than a dollar a day.

As in El Salvador, the decision of a poor country to open up to bitcoins can be interpreted as an attempt to attract liquidity and investment capital from all over the world, and also offers residents the possibility to deposit their money (even small amounts) in a digital wallet in the absence of a widespread banking system in the region . The informal economy in Central Africa, which relies mainly on small trade, is far more important than the registered economy, and according to the government, Bitcoin can provide an independent regulatory tool for citizens. Of course, to make transactions on the blockchain, you must first have the money. and internet connectivity, which unfortunately cannot be taken for granted at these latitudes: according to the data portal data reportout of nearly six million people in the Central African Republic, only 11.4% have access to the Internet.

Although it was unanimously passed, not everyone supports the new law: a local report says some members of Parliament from the National Assembly’s Finance Committee have opposed the reform, denouncing how legal tendering of cryptocurrencies could promote money laundering. Trade in gold and diamonds and the financing of terrorist activities associated with the Civil War. This type of action, according to opponents, would harm the republic’s chances of receiving international aid, which have already declined in the past two years due to the government’s lack of transparency in spending on armaments for internal conflict.

A response is expected from the International Monetary Fund in the next few days, which at the time criticized Salvador for the same initiative. Just yesterday, during the approval of the Bitcoin law in Bangui, the International Monetary Fund published a dossier on the Central African Republic, where there were few signs of improvement in the lead up to the civil war. Now the rule of international organizations will be less lenient, above all because he fears that Putin’s hand is behind the “technological tipping point” in the country. Since 2018, the Wagner Group has been stationed in Central Africa, a Russian paramilitary unit allied with the central government and accused of atrocities and war crimes, and some analysts have already begun to connect the dots: Africa News, “The context with the systematic corruption and the Russian partner in light of international sanctions, raises many doubts. The search for ways to circumvent the sanctions imposed by Russia calls for caution.”

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