The Central African Republic has approved bitcoin as a legal tender.
It is only the second country to have done so.
Bitcoin has become a legal tender
The Central African Republic is one of the poorest countries in the world, but it is rich in diamonds, gold, and uranium.
It has been embroiled in conflict for decades and is a close Russian ally.
Deputies voted unanimously to adopt Bitcoin as a legal tender, the presidency said in a statement.
The move puts the Central African Republic “on the map of the bravest and most visionary countries in the world,” the statement said.
El Salvador became the first country to adopt Bitcoin as its official currency in September 2021.
The move has been criticized by many economists, including the International Monetary Fund, who said it increases the risk of financial instability.
Others have expressed fears that cryptocurrencies such as Bitcoin could make money laundering easier for criminals and be harmful to the environment because they consume so much electricity to produce.
The Internet is necessary for the use of any cryptocurrency, but in 2019, only 4 percent of people in the Central African Republic had access to the Internet, according to a report by the website WorldData.
The country currently uses the CFA franc, which France supports as its currency, along with most other former French colonies in Africa.
Some see the adoption of bitcoin as an attempt to shake the CFA, amid competition to influence a resource-rich country between Russia and France.
“The context, given systemic corruption and Russia’s partner facing international sanctions, raises suspicion,” said French analyst Thierry Vircoulon.
Will bitcoin make life easier?
Economist Yann Daworo told that it would make life easier because transactions can be done with smartphones and that it was easy to convert Bitcoin into 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 in order to buy abroad.”
He also claimed that the CFA was not being used “for the benefit of Africa”.
In several countries, there are growing calls for the currency to be rejected by those who see it as a relic of the colonial era, allowing France to continue to exercise economic control.
However, scientist Sydney Tickaya said he considered the adoption of the cryptocurrency to be “premature” and “irresponsible”.
“Internet access is still underdeveloped in the country, while Bitcoin is completely dependent on the Internet.”
He said the Central African Republic has more urgent issues such as security, education, and access to drinking water.
The Central African Republic has suffered from constant conflict since its independence in 1960.
Then in 2013, mostly Muslim rebels took control of most of the Christian country.
Detachments for self-defense were formed, which led to widespread riots along religious lines.
After President Faustin-Archange Touader took office in 2016, the country began shifting its strategic alliance from France to Russia.