The Central African Republic has voted to make bitcoin legal tender. This makes it the first country in Africa to do so and the second globally, behind El Salvador.
The Central African Republic has accepted bitcoin as a means of payment, as the country’s National Assembly unanimously voted on a bill that legalized crypto, offered a regulatory framework, and accepted bitcoin as legal tender. This makes the Central African Republic the first country on the continent that accepts bitcoin as a currency.
The Central African Republic’s economy is in need of some rescuing, so the country’s officials have agreed to use bitcoin and crypto to boost the economy, along with using technology to generally digitize it. It joins El Salvador in making bitcoin legal tender and is likely to incur some scrutiny from global organizations.
The draft for the bill was submitted by the minister of the digital economy, post services, and telecommunications, Gourna Zacko, and the minister of finance and budget, Calixte Nganongo. Some of the officials have said that investing in new technology and cryptocurrencies will be to the benefit of citizens, though it’s unclear what the broader solutions will be.
More than just making bitcoin legal tender, there are several benefits a government could take advantage of to boost economies. Smart contracts can be worked into multiple use cases, and this could really speed up and lower the cost of some fundamental processes.
Will more countries accept bitcoin as legal tender?
The Central African Republic follows El Salvador in accepting bitcoin as legal tender. This is a controversial stance for most existing financial institutions and governments, who fear that doing so will fester macroeconomic risks. The World Trade Organization (WTO) and the International Monetary Fund (IMF) have not shied away from saying so.
The countries that have made bitcoin legal tender say that it can improve their economies and usher in a new age of digitalization. This has yet to be completely proven, though it is still early days for El Salvador, which is spearheading this movement.
Other countries will be looking to El Salvador and The Central African Republic for information on how their experiments are panning out. It’s unlikely that most countries will make bitcoin legal tender, but they are likely to be more accepting of crypto and its everyday use. For example, Colombia is seeing more crypto ATMs.