May 18, 2022

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The outpost of African bitcoin raises many red flags

LONDON (Reuters’ Breaking News) – The latest bitcoin fans are far from the Silicon Valley Crypto Brothers. The war-torn Central African Republic (CAR) on Wednesday accepted the digital currency as a legal tender. This is weirder than what El Salvador did last year. The surprise expressed by the region’s central bank and President Faustin-Archange Touadra’s military bias against Russian mercenaries are warning signs. Bitcoin’s path to the mainstream of the currency is now rocky. The conversion of El Salvador to cryptocurrencies in September made headlines and drew many sighs from the International Monetary Fund. In just a few months, nearly 4 million people, or two thirds of the population, have invested in the new Chivo e-wallet system in Central America. However, all but a few were satisfied with the conversion of the US dollar to digital rather than bitcoin. Six months later, according to the El Salvador Chamber of Commerce, only 14% of Salvador merchants had a crypto transaction. Crypto’s case in CAR looks even weaker. Most of the 5 million citizens of the former French colony enjoy per capita GDP of only $ 525, with no access to broadband or 4G phone reception, which is a prerequisite for bitcoin-based transactions. Unlike El Salvador, one-third of the population works in the United States, and some Central African immigrants abroad are willing to send money home. In addition, residents of Bangui, its river capital, already have access to digital currency through mobile cash networks operated by operators such as France’s Orange. Also – unlike many deeply impoverished countries – they have a fixed currency thanks to the CFA franc of six countries, which is linked to the euro, supported by the Bank de France and overseen by the regional bank of Central African countries. (BEAC) in neighboring Cameroon. Turning this system against the wild oscillations of bitcoin does not apply to Tutra’s vision of a new era of peace and prosperity induced by cryptocurrencies. BEAC’s surprise over Bangui betting on Bitcoin raises serious eyebrows. A number of Russian mercenaries have been charged by the UN since 2018. https://www.bbc.com/news/world-africa-59699350 Atrocities including torture, rape and brief executions. With US and EU sanctions imposed after Russia’s occupation of Ukraine, it will be difficult to pay their employer, the Wagner Group. Bitcoin – along with CAR’s gold and diamond reserves – can provide an alternative way of paying. If so, the tar will be done by the cryptocurrency association.

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– The Central African Republic (CAR) announced on April 27 that it had adopted Bitcoin as its legal currency. The country is following in the footsteps of El Salvador who converted the crypto unit into an official currency in 2021.

– CAR is one of the six countries that use the Central African CFA franc, which is a regional currency administered by the Bank of Central African States (BEAC) based in neighboring Cameroon.

– A BEAC spokesman said the company was only aware of the CAR acceptance of bitcoin by the general public at the same time. Reuters reports that two former prime ministers of Central Africa have signed a letter describing the unilateral move as a “serious violation”.