The Central African National Assembly passed the bill amending and supplementing the law governing cryptocurrency in the country on March 23. The new text grants Bitcoin the status of a reference cryptocurrency and not a legal tender. This amendment is undoubtedly the result of injunctions from the Bank of Central African States (Beac) and the Economic and Monetary Community in Central Africa (Cemac).
Central African Republic abandons Bitcoin
In April 2022, the Central African Republic had made the news in the crypto industry. The small Central African country had granted Bitcoin the status of legal tender alongside the Franc des colonies Françaises en Afrique (FCFA). The Central African Republic became the second country in the world to legalize Bitcoin after El Salvador.
However, the country did not last long like El Salvador. On March 23, the National Assembly of the Central African Republic adopted a text amending the law governing cryptocurrency in the country. This new text grants Bitcoin the status of a reference cryptocurrency and not an official currency.
This text responds to criticism and injunctions from regional institutions. Indeed, the Franc des Colonies Françaises en Afrique (FCFA) is not just a legal currency in the Central African Republic. The FCFA is thus managed by the Bank of Central African States (BEAC), which has clearly taken a dim view of the legalization of Bitcoin in the Central African Republic.
The Central African Republic’s decision also drew criticism from the Economic and Monetary Community of Central Africa (CEMAC). Last July, CEMAC said the Central African law was incompatible with the agreements and conventions governing the Central African Monetary Union and the statutes of the BEAC.
The future of cryptocurrency in the Central African Republic
The abandonment of Bitcoin as a legal tender by the Central African Republic is an unfortunate step backwards. This is the mention “legal tender”. which the CEMAC and the BEAC wanted to see disappear. For these two institutions, the only legal currency must remain the CFAF.
Nevertheless, the country remains one of the regions favorable to cryptocurrencies. Indeed, cryptocurrency exchanges in the country are not subject to taxation. However, gains from trading are subject to the general tax system of the country. Businesses are free to accept cryptocurrency and will have to refer to the FCFA for accounting purposes. Cryptocurrency mining is also allowed in the country. However, miners must declare their earnings like any other economic actor in the country.
Meanwhile, El Salvador continues its romance with Bitcoin
While the Central African Republic is abandoning Bitcoin, El Salvador keeps promoting the queen of cryptocurrencies. After having defended Bitcoin against critics, the Salvadoran president started a DCA for his country. Since November 18, 2022, the country has been buying 1 bitcoin every day. When the DCA was launched, Bitcoin was only worth $16,600. Today Bitcoin is trading at $27,500 USD.
Despite the negative predictions of the media and economists, El Salvador has managed to to pay all its debts. This would never have been possible without the economic momentum spurred by the adoption of Bitcoin. Tourism, for example, has increased by 95% in the country since the adoption of Bitcoin. Very suspicious at first, the IMF finally recognized that Bitcoin did not ruin El Salvador.
Based on these results, El Salvador continues to lay the groundwork for widespread adoption of Bitcoin. Very recently, the country launched a program to train young Bitcoin developers. Also, Nayib Bukele considers granting a tax exemption to all fintechs established in its country. If the proposed law of Nayib Bukele is passed by parliament, El Salvador could attract several tech investors.
El Salvador gets it, Bitcoin is a golden opportunity. It is even more so for weak and totally controlled economies like the Central African Republic. Bitcoin is also a tool to restore dignity to the people of French-speaking Africa. How is it possible that more than 60 years after independence, some African states still have the Franc des Colonies Françaises en Afrique (FCFA) as their official currency. It is time for Africa to emancipate itself and Bitcoin, which is not controlled by anyone, can help!
I dream of a world where every citizen has total control over themselves, including their finances. I believe that Bitcoin is one of the tools that will achieve this revolution. Since 2019, I am learning about this cryptocurrency and spreading the word around.