Central African Republic Becomes the First African Nation to Adopt Bitcoin

Bitcoin - the world’s most popular cryptocurrency that reached $64,000 in value on the stock market last year - has now become legal tender in the Central African Republic.

Image Credit: Michael Wuensch

Legislators of the Central African Republic have unanimously voted to adopt Bitcoin alongside the country’s main currency: the CFA Franc. The proposal was signed into law on Wednesday by the country’s President; according to a statement issued by the president’s office. The law also fully legalizes the use of digital currencies, and cryptocurrency exchanges are now exempt from tax.

The new law “places the Central African Republic on the map of the world’s boldest and most visionary countries”, said the presidency. On the other hand, the opposition is in disagreement, as they say that the aim of the law is to undermine the regional currency: which is supported by France, and has its exchange rate tied to the euro. Currently, the CFA Franc is used by the Central African Republic, Cameroon, Chad, the Republic of Congo, Gabon and Equatorial Guinea.

El Salvador was the world’s first country to adopt Bitcoin as legal tender in September of last year. However, the International Monetary Fund was not in favor of the country’s decision. It has criticized the move for causing “large risks for financial stability” arising from price volatility of the cryptocurrency. Recently, the U.S.-based National Bureau of Economic Research carried out a survey which found that everyday transactions which use Bitcoin remain low. It also found that educated, young, male people are the ones who mostly use Bitcoin for that purpose.