RCA has adopted bitcoin as its official currency.
The Central African Republic (CAR) adopted bitcoin as its official currency, in partnership with the CFA franc. This measure provoked a rather unusual reaction from the Bank of Central African States (BEAC), which administers the common currency, the CFA Franc, in the Central African region used by six countries: Cameroon, CAR, Chad, Republic of Congo, Gabon and Equatorial. Guinea.
The decision was made public by President Faustin Archange Touadéra who made the surprise announcement by stating that the country's parliament had approved a law "which governs all transactions" in cryptocurrencies and makes bitcoin a "reference currency" alongside the franc. CFA.
the reactions
In response to the measure, BEAC issued a statement in which it states that RCA’s adoption of the new cryptocurrency law is “null and void” as it violates regional bloc principles.
“This law suggests that the CAR aims to establish a currency that competes with or is intended to replace the Central Bank of Central Africa and the CFA Franc,” they said in a statement.
The IMF also expressed concern about CAR's decision, protesting that the move was made without consulting the regional economic union, the Central African Economic and Monetary Community (CEMAC).
The adoption of bitcoin as legal tender in CAR has also raised several questions by some financial analysts across Africa in which the inconsistencies of this decision were noted.
hypothetical application
The real reasons for this decision, however, are obscure since its practical application seems quite hypothetical, in a country with only 5,5 million inhabitants and extremely poor.
Most of the country does not have internet and even if transactions can be carried out at ATMs, the population would have to be “educated” in its use, since practically no one knows what a cryptocurrency is.
However, that is exactly what is expected to happen. Serge Ghislain Djorie, government spokesman said:
“We are going to educate the population for its use, soon we are going to implement the use of optical fiber in RCA and, a weak Internet connection is enough to buy cryptocurrencies”.
But even among the few entrepreneurs in CAR who have the means and know the technology to use it, they were stunned by this government decision.
"I have no interest in having bitcoins, we don't have the infrastructure, we don't have the knowledge to embark on this adventure, there's not even a single cybercrime unit to guarantee security."
A businessman from Bangui who wants to remain anonymous explained, adding:
“There are other priorities like security, energy, access to water, internet, road construction…”
But it is not just the businessmen who demonstrate the “strangeness of the measure”. Ousmène Jacques Mandeng, professor at the London School of Economics and Political Science, said:
“While bitcoin may facilitate some transactions, it is an odd choice as a regular means of payment.”
Bitcoin's Volatility
States, when adopting another currency, usually choose a more stable currency than their own (dollar, euro, pound, etc.), as the price of bitcoin is extremely volatile.
Ganesh Viswanath-Nastraj, professor at Warwick Business School, warns of this volatility, if indeed the cryptocurrency is adopted:
“Bitcoin’s excessive volatility translates into fluctuations in economies and household consumption and wealth.”
Didier Loukakou, regulatory director at the Central African Financial Market Supervision Commission (Cosumaf) was also surprised and said:
“There is currently a process for a concerted framework between the six CEMAC countries, and anti-money laundering regulatory authorities to legislate on cryptocurrencies and we were not notified by Bangui of this decision.”
Conclusion
The government of CAR surprised everyone and everything by the incongruity of this legislation that allows the use of digital currency in a state at war and almost bankrupt that can barely feed its population without international humanitarian aid.
Not to mention its inability to pay all its civil servants without resorting to foreign support and whose Minister of Economy, even recently, considered the state of public finances to be “alarming”.
The adoption of bitcoin as the official currency raises the suspicion that CAR, the only other state besides El Salvador, to adopt digital currencies, is wanting to promote dubious transactions, at a time when the regime is under heavy fire. of the UN.
What do you think of this decision by RCA? Are they thinking further ahead than other countries in the world, or are there dark intentions in this decision? We want to know your opinion, do not hesitate to comment and if you liked the article, share and give a “like/like”.
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