In response to the Central African Republic’s adoption of Bitcoin as legal tender, several financial specialists in Africa have raised a number of questions.
At a time when the regime is under pressure from the United Nations, there are suspicions that the only state to have adopted Bitcoin, along with El Salvador, is attempting to encourage fraudulent transactions, according to analysts in a report by Africanews on May 5.
In an announcement on April 28, President Faustin Archange Touadéra said that the parliament of this impoverished central African nation had enacted legislation “governing all transactions” in cryptocurrencies and designating Bitcoin as a “reference currency” alongside the CFA franc.
Many citizens in CAR don’t know about crypto
The legalization of Bitcoin is a source of consternation in front of one of the city’s few ATMs.
“What is it?” Sylvain, a 30-year-old man, waiting in line. “I don’t know what cryptocurrencies are; I don’t even have internet,” Joelle chuckles as she stands in front of her modest vegetable stall.
Government spokesman Serge Ghislain Djorie assured AFP said: “We will educate the population and soon move to fibre optics and a weak internet connection is enough to buy cryptocurrency.”
Businessmen have doubts about Bitcoin
Even among the few businessmen who are likely to have the resources, expertise, and technology to take advantage of it, the legislation is a source of consternation.
“I have no interest in having Bitcoins here, we have no infrastructure, no knowledge to embark on this adventure, there is no cybercrime unit to guarantee security,” explained an entrepreneur from the Central African Republic’s capital Bangui, adding: “there are other priorities such as security, energy, access to water, internet, building roads…”
Meanwhile, Ousmène Jacques Mandeng, a professor at the London School of Economics and Political Science, opined:
“While bitcoin may facilitate some transactions, it is a strange choice as a regular means of payment” in such a country.
Elsewhere, Didier Loukakou, director of regulation at the Central African Financial Market Supervisory Commission (Cosumaf), stated:
“There is currently a process for a concerted framework between the six countries of the Economic Community of Central African States (CEMAC), the anti-money laundering authorities and regulators to legislate on cryptocurrencies,” but “we have not been notified by Bangui of its decision.”
Notably, since CAR adopted Bitcoin, the flagship digital asset has seen its price drop below $36,000. However, the asset is $36,048.56 is now trading just above this level, up 0.04% on the day but down 6.63% in the last week, according to CoinMarketCap data.