The Central African Republic (CAR) has become the second country to adopt Bitcoin as its national currency, following El Salvador’s adoption of the cryptocurrency last year.
The CAR government says a bill to embrace Bitcoin has passed the country’s parliament unanimously, reports Reuters and BBC News. (Although former CAR Prime Minister Martin Ziguele complained that the bill had been approved “by proclamation.”) The office of CAR President Faustin-Archange Touadera claimed that the move would “improve the conditions of Central African citizens” and distinguish the CAR as “one of the most daring in the world”. and the most visionary countries.
However, geopolitical analysts and financial experts are baffled by the motivations behind this decision. CAR is a landlocked country rich in resources like gold and uranium, but remains one of the poorest countries in the world. It has been ravaged by civil war since 2012 and only 11% of the 4.8 million inhabitants have access to the Internet. It is one of six states in Africa to use the Central African CFA franc as its currency – “a regional currency backed by France and pegged to the euro”, according to law firm Baker McKenzie.
Some have suggested that CAR’s adoption of bitcoin is an attempt to undermine the CFA franc and reprimand the country’s former colonial power, France. “It’s a big middle finger for the French economic system,” said Chris Maurice, CEO of cryptocurrency exchange Yellow Card, which focuses on users in Africa. Reuters.
Others say the move could be linked to CAR’s close relationship with Russia. The CAR was one of the few countries to abstain in a United Nations vote condemning the Russian invasion of Ukraine, while the country’s government was condemned for deploying mercenaries from the Russian group Wagner to fight rebel groups.
“The context, given systemic corruption and a Russian partner facing international sanctions, encourages suspicion,” analyst Thierry Vircoulon of the French Institute for International Relations told AFP news agency. (via BBC News).