• Sat. May 21st, 2022

Central African Republic Passes Digital Currency Regulation Bill

ByHazel R. Lang

Apr 29, 2022

The Central African Republic (CAR) has become the latest country to regulate the digital currency industry. Lawmakers across the country have passed a new bill to regulate the fledgling industry and facilitate the use of digital currency in financial markets, local media reports.

While several media outlets reported that the CAR had adopted BTC as legal tender, just like El Salvador, the country’s finance minister, Hervé Ndoba, clarified that the African country had just created a regulatory framework intended to encourage adoption. and the use of digital currencies in the local economy.

Under the regulations, which the National Assembly passed last week, the country is set to create a new regulatory body to oversee the industry. In an interview with Bloomberg, Ndoba said he believes the new law will push CAR to the forefront in the adoption of digital assets, changing the narrative that African countries are always late adopters of new technologies.

“There is a common narrative that countries in sub-Saharan Africa often lag behind when it comes to adapting to new technologies. This time we can actually say that our country is one step ahead,” the minister told Bloomberg.

He further clarified that the legislation is in no way similar to the Bitcoin Law of El Salvador. This law was imposed by President Nayib Bukele last year, who bulldozed it through parliament. This forces all merchants in the country to accept BTC for payments whether they like it or not, even though it uses precious national reserves to accumulate on BTC. Ironically, Bukele sees BTC as an investment tool that he thinks will go to the proverbial moon, but he has imposed a law that forces his people to use it as currency.

This law was so draconian that even BTC enthusiasts disavowed it and called out Bukele for it.

In CAR, the government does not seek to push digital assets on the people. Instead, he seeks to protect them when they decide to use them. Digital Economy Minister Justin Zacko, who was also in favor of the law, said it would give locals a better way to send money across borders, which has become increasingly popular. difficult and expensive.

Although the new law is a giant step towards the adoption of digital currency in the CAR, several limiting factors could slow down this adoption. For one thing, internet penetration in the country is the fifth lowest in Africa at just 11.3%, according to Statista.

In contrast, African countries leading in the adoption of digital assets have very high internet penetration, which gives Bitcoin a much larger user base. Kenya leads the continent with 85% penetration. This is also reflected in the adoption of digital assets, with the East African country ranking first in the world for peer-to-peer trading volume two years in a row according to the Chainalysis Global Crypto Adoption Index.

The adoption of digital assets in the CAR will also be severely hampered by the country’s economic difficulties. Despite vast reserves of gold and diamonds, it is still one of the poorest countries in the world and the fifth poorest in Africa. Years of internal conflict have devastated the economy, the most recent being a confrontation between the government and religious rebels.

While the government fully supports the legalization of digital assets in the CAR, another challenge may emerge from the country’s opposition leaders. Most of them either voted against the bill or abstained from voting.

French state-run media RFI reported that executives expressed “strong reservations” against the bill, saying digital assets “will promote the laundering of dirty money and make the country a hotbed for tax evasion and evasion.” .

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