The Central African Republic (CAR) has become the center of the latest turmoil in the world of cryptocurrencies. According to social media reports, the country has adopted bitcoin (quotation BTC) as legal tender, in the style of El Salvador. However, sources from the African continent report a different reality.
Regulation of the use of cryptocurrencies
On Thursday 21 April, the National Assembly of the African country unanimously approved a bill that provides for the regulation of the use of cryptocurrencies such as bitcoin in its territory, as reported by the LeTsunami media.
The proposal for this law was issued by the minister of digital economy, post and telecommunications, Justin Gourna Zacko, according to the same source. The official explained that the aim of this document is "to establish a favorable environment for the financial sector that meets the needs of the financial profession and all economic actors". Furthermore, the country must have a legal framework that regulates cryptocurrencies and the businesses that use them.
Likewise, the minister assured that investing in this type of digital goods "has many benefits for millions of users". He also referred to market volatility as an element that "must not be lost sight of".
Something striking in the cabinet member's remarks was his reference to the ability not to rely on central banks, with a very different stance from that usually taken by governments on the issue:
“With cryptocurrencies, there is no longer central bank control. You have your money, you send it to an investor for a deal, you get it in any currency, you can have it in dollars, euros, CFA or Naira. There are so many advantages of cryptocurrencies, that I cannot mention them all here, but first we should have the legal frameworks to allow any Central African to also benefit from this possibility to transfer money and receive money " - Justin Gourna Zacko, Minister of Digital Economy, Posts and Telecommunications.
False alarm: the country has not "adopted" bitcoin
The report does not include any mention of the adoption of bitcoin or any other cryptocurrency as fiat money. However, media such as Forbes Monaco and dozens of bitcoiners on the networks have been reporting what happened as a new country taking the road to El Salvador.
While this is not the case, there is still a group of local MPs who have shown their resistance to passing the law. Their arguments are the same as those of regulators and governments around the world: they view bitcoin and cryptocurrencies as a tool that facilitates money laundering, tax fraud and scams.
The Central African Republic is a country of approximately 623 square kilometers with a population of just over 5 million. In addition to a convulsive political situation, it is considered one of the poorest countries in the world, so its population could benefit from the use of assets such as bitcoin, as it would not be dependent on the economic policies of their rulers.
With small and struggling economies, Africans have been looking for alternatives like bitcoin for years. This is reflected in the high trading volumes of cryptocurrency on P2P marketplaces. Unlike the Central African Republic this time around, governments haven't always been friendly to BTC.
Indeed, in Nigeria, a ban was even approved but then lifted. Finally, the country's government announced the creation of its own central bank digital currency, the eNaira, following the trend of most governments around the world.