After El Salvador last year, The Central African Republic (CAR) has become the second country to decide to adopt Bitcoin as an official currency.
According to a statement from the Presidency, lawmakers in the CAR parliament voted unanimously to pass a bill legalizing Bitcoin, among other cryptocurrencies.
Bitcoin will now be considered legal tender alongside the regional Central African CFA franc.
Chief of Staff to President Faustin-Archange Touadera, Obed Namsio, said that the move was a decisive step toward opening up new opportunities for the country.
.The CAR is rich in diamonds, gold and other valuable minerals, but ranks as one of the world’s poorest and least-developed countries.
According to the World Bank, 71 percent of CARs inhabitants were living below the International Poverty Line in 2020.
For years now, the landlocked country has been embroiled in political instability and violence.
An independent author following crypto closely over the years, David Gerard, said that the big question is who the cryptocurrency ruling is for. He further added that Internet penetration in the CAR is only 11 percent, and it is not clear how that will bootstrap payments in the country.
The move to consider bitcoin legal tender received praise from the crypto community, and was viewed as yet another step toward mainstream adoption of cryptocurrencies.
CAR decision met with controversy
Such a decision can also be viewed as controversial. There were protests in El Salvador after the country introduced its Bitcoin Law, and the country also faced criticism from the International Monetary Fund for adopting it as legal currency.
The IMF has urged El Salvador to drop bitcoin as legal tender, raising concerns over the risks it poses to financial stability and consumer protection.
Bitcoin is a notoriously volatile asset, which raises questions about its role as a standard method of payment. It was last trading at around USD39,686 Thursday, down 6% in the last 24 hours. The cryptocurrency has lost around 42% of its value since an all-time peak above USD68,000 in November last year.
In the backdrop of Russia’s war against Ukraine, many Western countries have sounded the alarm over the potential use of cryptocurrencies as a way to evade sanctions.
According to the UN, Russian mercenaries have provided direct assistance to the government, and the CAR is a close ally of Russia.
Experts suggested the move could help small countries like the CAR reduce their dependence on the U.S. dollar for global trade.
CEO of crypto platform Likvidi, Ransu Salovaara, observed that the dollar has been the global oil currency since the middle of the twentieth century.
He added that dependency on oil is a major issue now because of the SWIFT ban and the war on Ukraine, and that this is a time when global, unstoppable cryptocurrencies like Bitcoin can really shine.