- The central African Republic becomes the first country in Africa and second in the world (after the Republic of El Salvador) to legalise bitcoin
- The legal tender title of bitcoin in the country implies the acceptance of cryptocurrencies as a legal means of payment in any transaction through specific rules and regulations
- The legalisation of bitcoin in the first African country will transform the country’s infrastructure and facilitate the blockchain technology and web3 applications to thrive
The central African Republic becomes the first country in Africa and second in the world (after the Republic of El Salvador) to legalise bitcoin.
The step means that the country now accepts the adoption of bitcoin as a legal payment currency. On April 21, 2022, CAR’s National Assembly unanimously adopted the bitcoin adoption bill to help in the plan for economic recovery and peacebuilding.
Gourna Zacko (the minister for digital economy, post services and telecommunications) and Calixte Nganongo (the minister for finance and budget) initiated and submitted the draft law to establish a legal framework for crypto regulation and Bitcoin as an official currency in the Central African Republic.
The ministers submitted the framework for bitcoin adoption and cryptocurrency regulation in the Central African Republic. The presented bill has been studied and approved by the Council of Ministers to be studied further by the joint commission.
The legal tender title of bitcoin in the country implies the acceptance of cryptocurrencies as a legal means of payment in any transaction through specific rules and regulations. This means that no vendor, trader or organisation can deny service payment through bitcoin as illegal.
This move comes after several countries in the continent have restricted trading in bitcoin, and most of them are lukewarm about the market.
The legalisation of bitcoin in the first African country will transform the country’s infrastructure and facilitate the blockchain technology and web3 applications to thrive. With legalising cryptocurrencies, the Central African Republic is moving towards a new path of technological development and economic performance. This dynamic field is popular among investors worldwide and ever-present as full-fledged assets in the portfolios of the world’s largest financial players such as Microsoft, Meta and Amazon.
This initiative will completely transform the CAF’s digital infrastructure by applying the blockchain technological innovation necessary for the project’s implementation.
Investing in cryptocurrencies will benefit millions of users in the country. Could this be preparing a way to adopt digital currency in the Central African Republic?
How big is the move from the two countries?
The whales in the crypto market might say the legalisation of bitcoin in the two countries is not as significant to the bearish crypto market that has been on since November last year when bitcoin hit its all-time high.
However, tagging the move from CAF and El Salvador inconsequential is an ultimate understatement, for the “flapping of a butterfly in Antarctica creates ripples that can cause a tornado in the Chihuahuan desert.”
As of 2020, El Salvador’s GDP stood at 24.64 billion, and that of the Central African Republic was 2.303 billion. The economic state of both countries does not qualify their bitcoin legalisation as a significant move, but it will create a domino effect in other countries.
A domino effect is an event that initiates the occurrence of similar events in succession.
Could Africans revive the bitcoin dump?
This Saturday, bitcoin fell below the US$40,000 mark, again highlighting the unpredictability of the market in 2022, with the Fear to Greed ratio falling to 24.
Since November last year, when bitcoin hit the US$69,000 mark, bitcoin and other cryptocurrencies have been experiencing a constant dump, usually referred to as a bearish market. Experienced traders who have been in the crypto market for a long time believe that Africans could reverse the trend.
Chainalysis reports that Africa has experienced a 1,200 per cent growth in cryptocurrency payments in 2021 compared to 2020. Africa is the fastest-growing cryptocurrency market among developing economies and the third-fastest growing market in the world.
Despite the rapid adoption, it remains the smallest crypto market inking the potential that the market has to revamp the dumping of bitcoin and other cryptocurrencies. One of the ways that Africans can get into the crypto world is by selling their creativity as NFTs.