Inducting itself as the second country in the world to make such decisions, the Central Africa Republic (CAR) has signed a bill into law, adopting Bitcoin as a legal tender. This means that over 4.8 million residents in the country can now use Bitcoin as well as the Franc to make payments. Legalizing the use of cryptocurrency in the financial system would make the Central African Republic second in the world after El Salvador which also passed the bill into law in September 2021.
The CAR shares the sovereignty of France and as such is a member of the CFA Franc monetary system. However, the adoption of Bitcoin will grant the CAR freedom for more cross-border and global payments with speed and ease as against the limitations of the regional currency and its "France-centric" agendas. Generally, Money is an instrument of economic governance and digital currency or cryptocurrency is no exception. As the government of CAR believes it has what it takes to properly manage Bitcoin and incorporate digital finance which would facilitate development.
Following El Salvador's decision which has been a talking point, with many raising concerns about price volatility, the government of CAR will be looking to ensure the living standards of its citizens. As the Bitcoin prices could rise and fall affect the value of merchants' earnings. Going forward, the government will look to reassure individuals and businesses with effective plans on how to manage this risk as it could influence the rate of foreign investment into the country.
The Central African Republic in focus:
Population: 4.83 million in 2020 as compared to 4.38 million in 2019
GDP: $2.3 billion compared to $2.1 billion in 2019
GDP per capita: $476 in 2020 compared to $488 in 2019