Central African Republic Suits El Salvador To Make Bitcoin Legal Tender

The Central African Republic has adopted Bitcoin as legal tender, becoming the second country to do so after El Salvador.

Lawmakers in the Central African country have unanimously passed a bill to make Bitcoin legal tender alongside its CFA franc and legalize the use of cryptocurrencies.

President Faustin Archange Touadera signed the measure into law, his chief of staff Obed Namsio said in a statement.

CAR “is the first country in Africa to adopt Bitcoin as legal tender,” Namsio said.

“This decision puts the Central African Republic on the map of the boldest and most visionary countries in the world,” he added.

The new legislation covers the use of cryptocurrencies and those who use them, in online commerce, “smart contracts… by blockchain technology” and “all electronic transactions”.

He also said that cryptocurrency exchanges are not subject to tax.

However, due to the high volatility of the digital currency, some are wary of this decision.

Martin Ziguele, a former Central African prime minister turned opposition MP, complained that the bill had been approved “by proclamation” as some lawmakers intend to file a complaint against it in the Constitutional Court.

“This law is a way out of the CFA franc through a way that empties the common currency,” Ziguele said.

“This [the law¨] is not a priority for the country,” he said. “This decision raises the question: who benefits?

Regulators around the world share the same concerns. Some also say that transfers using cryptography are a perfect tool for traffickers and money launderers because they can be anonymized.

While countries like India have banned crypto transactions in the past, El Salvador became the first country to adopt Bitcoin as legal tender last September.

But El Salvador’s decision was strongly criticized by the International Monetary Fund (IMF).

“The adoption of a cryptocurrency as legal tender, however, carries great risks to financial and market integrity, financial stability and consumer protection,” he warned.

The CAR is one of the poorest countries in the world and has been plagued by a nine-year civil war that developed largely along sectarian lines.

In 2020, a coalition of rebels advanced on the capital Bangui, threatening to overthrow Touadera ahead of new elections.

Russia sent paramilitaries to help repel the threat and then reclaim much of the rebel-held territory.

The agents are described by Bangui as military advisers but by France, the UN and others as mercenaries from the Kremlin-backed Wagner Group, which has been accused of abuse.

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Central African Republic Suits El Salvador To Make Bitcoin Legal Tender

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