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The Central African Republic has passed a law creating a legal framework for cryptocurrencies, with a particular focus on Bitcoin. The legislation is designed to create a welcoming environment for the country’s financial sector while making money transfers more efficient.
The Benefits of Bitcoin in Africa
The Bill Governing Cryptocurrency in the Central African Republic was passed unanimously by the National Assembly on April 21st. It’s been entrusted to Mixed Commission on Economy, Finance and Planning/Equipment and Communications chairman Guy Samuel Nganatoua for examination.
As reported by Central African news portal LeTsunami.Net, the bill is part of the nation’s “plan for recovery and consolidation of peace.” Digital Economy Minister Justin Gourna Zacko states that its purpose, is to create a legal framework for managing the technology.
In his view, crypto provides technological benefits thanks to the theoretical inviolability of blockchain. In particular, it can help the nation’s residents manage international transfers outside of the central bank. As he describes, legacy financial infrastructure makes for a very “difficult”, “complex”, and “controlled” environment.
“With crypto-currency, there is no more control of the Central Bank,” he said. “You have your money, you send to an investor for a business, you receive it in any currency, you can dispose with it in Dollar, Euro, CFA, or Naira”.
In particular, the CFA is a remnant of colonial France that facilitates economic integration between the old colonies. However, the currency – which is used by the Central African Republic – is not recognized by the IMF. That means its prospects for international trade are highly limited, and tightly controlled by France.
UFC Heavyweight Champion Francis Ngannou elaborated on these troubles at Bitcoin 2022 earlier this month. He explained that bank accounts in Africa are something of a privilege, that a minority of people can afford.
“There are so many advantages in crypto-currency,” continued Zacko, “but we would have to have the legal frameworks first to allow any Central African to also benefit from this possibility of transferring money and to receive money”.
The minister also recognized the benefit of cryptocurrencies from an investment perspective, while staying wary of their volatility.
Is This a Legal Tender Bill?
On Saturday, Forbes reported on this bill, claiming that it makes Bitcoin legal tender for the Central African Republic.
The original report makes no mention of Bitcoin as legal tender, but multiple outlets and figureheads have echoed Forbes’ claim.
For example, Bitcoin state adoption advocate Samson Mow called it a legal tender bill Sunday afternoon. He later clarified that it applied to other cryptos as well, but didn’t withdraw the legal tender claim.
24/7 news bulletin’s report would appear to support the ‘legal tender’ idea as well. By their account, the bill allows taxes to be paid in cryptocurrencies through government-recognized platforms. It also imposes large fines and jail time on merchants that don’t accept crypto at the point of sale.
Furthermore, the Central Bank would apparently allow for instant and automatic convertibility of cryptocurrencies. However, the central bank has not been consulted on this bill, making this concept theoretical still.
Overall, these alleged details would make the law almost identical to El Salvador’s Bitcoin Law, which passed last June. Like the Central African Republic, El Salvador was attracted to Bitcoin as a means for cheap international remittance payments. In fact, an MP from Tonga – the world’s most remittance dependant country – is pushing to make Bitcoin legal tender in his own region.