The central African Republic (C.A.R.) adopts bitcoin as a legal currency

The Central African Republic (CAR) has adopted bitcoin as legal tender, becoming the second country in the world to make the move after El Salvador.

Lawmakers unanimously adopted a bill that made bitcoin legal tender alongside the CFA franc and

also legalized the use of cryptocurrencies, and President Faustin Archange Touadera signed the measure

into law, the president’s office said Wednesday.

So, the CAR “is the first country in Africa to adopt bitcoin as legal tender,”

his chief of staff Obed Namsio said in a statement.

“This move places the Central African Republic on the map of the world’s boldest and most visionary countries,” he declared.

The landlocked state is one of the planet’s poorest and most troubled nations, with an economy that is heavily dependent on mining.

El Salvador became the world’s first bitcoin adopter on September 7.

However, Just like El Salvador’s economy, which depends on the US dollar, CAR’s regional currency has

the backing of the French. This means that the country does not have an independent monetary policy, and hence, has no control over the supply of money within its borders.

As things stand, the Central African CFA franc (XAF) has an average annual inflation rate of 4.8%. However, over the past five years, the inflation rate has fluctuated in a wide range of -3% to 12%.

The introduction was heavily criticized by the International Monetary Fund (IMF).

It warned of “large risks associated with the use of bitcoin on financial stability, financial integrity, and consumer protection” and with issuing bitcoin-backed bonds.

By Taiyelolu A

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