Surprisingly, yesterday, the Central African Republic became the second country in the world to adopt Bitcoin as legal tender.
A statement from the CAR presidency, after lawmakers unanimously voted on the adoption said, “The move puts CAR "on the map of the world's boldest and most visionary countries.”
While the CAR is one of the poorest countries in the world and has been the center of conflict for decades, it is rich in gold, uranium, and diamonds.
CAR is also a close Russian ally, with mercenaries from the Wagner Group helping fight rebel forces. This has led to speculation that the adoption of Bitcoin could be used for nefarious purposes such as money laundering, or other criminal activity.
Some see the adoption of Bitcoin as an attempt to undermine the CFA, amid a contest for influence over the resource-rich country between Russia and France.
French analyst Thierry Vircoulon told the AFP news agency, "The context, given the systemic corruption and a Russian partner-facing international sanctions, does encourage suspicion.”
Currently, the Central African Republic uses the French-backed CFA franc as its currency, as is standard with the majority of other former French colonies in Africa.
Economist Yann Daworo told BBC Afrique it would make life easier, as transactions can be made with smartphones and it was easy to convert Bitcoin to any other currency.
"Businessmen will no longer have to walk around with suitcases of CFA francs that will have to be converted into dollars or any other currency to make purchases abroad," he said.
He also argued that the CFA was not being used "to benefit Africa" as many see the currency as a replica of the colonial era which allows France to continue to exercise economic control over the whole country.
Lack of Internet Access May Pose a Problem
However, if citizens of the CAR do want to start using Bitcoin, they’ll need access to the internet. Given that in 2019, it was estimated only around 4% of the population had access to the internet, it may be a slow process enabling as many people as possible to use Bitcoin in their everyday lives.
Computer scientist Sydney Tickaya stated that he thought the adoption of the cryptocurrency was "premature" and "irresponsible", adding, "Internet access is still underdeveloped in the country and the CAR has more pressing issues such as security, education, and access to drinking water.”
With this country only being the second in the world and given their current economic instability, time will tell if this adoption will bring development and progress to the country or not.
El Salvador #1
On September 7, 2021, El Salvador became the first country in the world to accept Bitcoin as legal tender. The move prompted both fear and excitement among citizens who were torn between innovation and being scared of losing money along the way due to Bitcoin’s volatility.
In an interview with the BBC, Salvadorian taxi driver, Daniel Hercules said, "I've accepted Bitcoin for about two months since I knew this was coming. I just had someone pay me $40 in Bitcoin for a fare to the airport but it's rare. Only around 10% of customers prefer to pay with Bitcoin."
He also added that the cost of converting Bitcoin into the local currency - the US dollar - is high at 10%, so he is using the money like a savings account.
He hopes to grow his wallet to around $1,000 in Bitcoin but is scared about the currency crashing, "It is one of the things that worries me the most. Losing money from long days of work would not be OK."
Given the demonstrable evidence of extreme fluctuations, for example, Bitcoin went from about $10,000 for a single coin in September 2020 to a high of $63,000 in April 2021 then fell to $30,000 in July this year, it’s easy to understand why traders and workers being paid in Bitcoin may leave them feeling a little uneasy.
In fact, the Central American University (UCA) conducted a survey on Bitcoin among residents. The results found that of the 1,281 people asked, only 4.8% understood what Bitcoin was and how to use it.
Additionally, more than 68% of participants disagreed with it becoming legal tender in the country.
Others in the country protested against the 200 new Bitcoin ATMs being installed in various locations as people worried that the cryptocurrency had only been adopted to distract the world from the government’s unpopular rule.
What Will the Future Hold?
For now, the Central African Republic seems more on board with the idea than the citizens of El Salvador. However, that’s only because we’re on the outside looking in. Perhaps in the following weeks and months, things will change or we’ll see what impact it has.
But we have all our fingers and toes crossed that the adoption by both El Salvador and the CAR lead to positive things for citizens, users, and the reputation of cryptocurrency.
Bitcoin Is the Future with Mining Syndicate
If you would like any more information about starting or expanding your Bitcoin horizon; reach out to us at Mining Syndicate. Our mission is simple: Strengthen the Bitcoin network by enabling small-scale miners to affordably purchase and reliably host miners.
As a small miner, Chris became frustrated by the lack of hosting options available for miners with under 100 units. As luck would have it, he found a 2.5MW mining facility for sale right down the road, and thus, Mining Syndicate was born. Facilities #2 and #3 are currently launching and #4 and #5 are in the works.
Why is Mining Syndicate so successful? Because we have a team of people who are just like you, eager to be a part of the future of mining. If you would like more information about how you can be a part of Mining Syndicate, how our facility works, or the products we sell, you can reach out to us here.
Join the largest mining pool in Texas from anywhere in the world!