On April 28, the Central African President, Faustin Archange Touadéra announced that the Parliament of this very poor Central African country had passed a law “governs all transactions” into cryptocurrency and made bitcoin a “reference currency” in the same way as the CFA Franc, the only official currency in the country. All payments in digital currency are allowed, including for taxes. Central Africans are wondering about this new currency and its access in a country where only 15% of the inhabitants have electricity, 10% have access to the Internet, according to the World Bank.
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Government spokesman Serge Ghislain Djorie wanted to reassure his compatriots: “We will educate the population and soon switch to fiber optics and a weak internet connection is enough to buy cryptocurrency”. According to Alexandre Stachchenko, Blockchain & Cryptos Director at KPMG France, “Bitcoin can fulfill the functions of a currency but, like gold, it is not the emanation of a government or an institution” before adding that “in many places, people can more easily access bitcoin rather than a bank”.
A questioning choice
However, bitcoin’s short is far from stable. Thereby, “unlike national currencies, bitcoin is a speculative asset”, notes Julien Prat, director of research at the CNRS and economist affiliated with the Ecole Polytechnique. ” Those who hold it generally use it relatively little for purchases and wait for its value to appreciate”, points to his side Jean-Paul Delahaye, professor emeritus in computer science at the University of Lille. And another drawback, “the value of bitcoin fluctuates too much against the dollar or the national currency”, recalls Julien Prat. A total of 21 million bitcoins can be issued.
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For the moment, only El Salvador and the Central African Republic have legalized bitcoin. And Bangui surprised everyone with this announcement given the domestic political and security context. In civil war for nine years, this country of 5.5 million inhabitants is dependent on international humanitarian aid, and must resort to donors to pay its civil servants. The Minister of Economy Félix Moloua had also recently judged “alarming” the state of public finances.
Finally, the power in place is currently under fire from criticism from the UN, several Western countries (including France) and NGOs who accuse it of being under the thumb of Russia and the “mercenaries” of Wagner, who “loot” resources, in exchange for military support against the rebels.