The Central African Republic has adopted bitcoin as its official currency alongside the CFA franc. The country has also legalised usage of cryptocurrencies, the presidency announced on Wednesday.
Parliament voted “unanimously” and considered the law “governing cryptocurrency in the Central African Republic” and President Faustin Archange Touadéra promulgated it. The Minister of State and Director of Cabinet of the Presidency, Obed Namsio said in a statement.
On September 7 last year, El Salvador became the first ever nation to adopt bitcoin as a legal tender and the International Monetary Fund (IMF) immediately denounced the move as dangerous for “financial stability, financial integrity and consumer protection”.
“This move puts the Central African Republic on the map of the most courageous and visionary countries in the world,” said the CAR presidency.
CAR is one of the globe’s poorest countries, but is rich in diamonds, gold and uranium.
It has been marred by conflict for decades and is a close Russian ally, with mercenaries from the Wagner Group helping fight rebel forces.
Critics have raised fears that cryptocurrencies such as Bitcoin could make it easier for criminals to launder money, and that they are environmentally damaging because they use so much electricity to generate.
The internet is required for one to use any cryptocurrency but in 2019, just 4% of people in CAR had access to the web, according to the WorldData website.
The country currently uses the French-backed CFA franc as its currency, along with most of the other former French colonies in Africa.
Some see the adoption of Bitcoin as an attempt to undermine the CFA, amid a contest for influence over the resource-rich country between Russia and France.
“The context, given the systemic corruption and a Russian partner facing international sanctions, does encourage suspicion,” French analyst Thierry Vircoulon told the AFP news agency.
In the capital, Bangui, the response was mixed.
According to Economist Yann Daworo, the move will make life easier, as transactions can be made with smartphones and it was easy to convert Bitcoin to any other currency.
“Businessmen will no longer have to walk around with suitcases of CFA francs that will have to be converted into dollars or any other currency to make purchases abroad,” he said.
He further argued that the CFA was not being used “to benefit Africa”. There are growing calls in several countries for the currency to be dropped by those who see it as a relic of the colonial era, enabling France to continue to exercise economic control.
Separately, computer scientist Sydney Tickaya said he thought the adoption of the cryptocurrency was “premature” and “irresponsible”.
“Internet access is still very low in the country while Bitcoin depends entirely on the internet,” he said, adding that the CAR had more pressing issues such as security, education and access to drinking water.
The CAR has suffered from ongoing conflict since its independence in 1960.
In 2013, mainly Muslim rebels seized control of the largely Christian country. Self-defence militias were formed to fight back, leading to widespread massacres along religious lines.
After President Faustin-Archange Touadéra came to office in 2016, the country started shifting its strategic alliance from France towards Russia.