{"id":816,"date":"2022-05-11T18:13:43","date_gmt":"2022-05-11T18:13:43","guid":{"rendered":"https:\/\/grandpascrypto.com\/?p=816"},"modified":"2022-05-11T18:13:45","modified_gmt":"2022-05-11T18:13:45","slug":"central-african-republic-the-second-country-to-make-bitcoin-legal-tender","status":"publish","type":"post","link":"https:\/\/grandpascrypto.com\/central-african-republic-the-second-country-to-make-bitcoin-legal-tender\/","title":{"rendered":"Central African Republic: the Second Country to Make Bitcoin Legal Tender"},"content":{"rendered":"\n

tl;dr Summary:<\/strong> The Central African Republic (CAR) announced it would accept bitcoin as legal tender. This approach to free themselves from their current currency, the CFA franc, is much different from Western African countries. Given the challenges El Salvador has faced with their attempt to make bitcoin legal tender, it begs the question whether this bill is realistic or merely political posturing.<\/em><\/p>\n\n\n\n

The Central African Republic (CAR) announced towards the end of April that it will accept bitcoin as legal tender. This now makes the second country to make bitcoin a legal tender, the first being El Salvador back in September of 2021.<\/p>\n\n\n\n

The CAR\u2019s parliament voted unanimously on a bill that would ratify the following:<\/p>\n\n\n\n

1)      Make bitcoin legal tender in the country<\/p>\n\n\n\n

2)      Legalize the use of cryptocurrencies<\/p>\n\n\n\n

Despite a unanimous vote from parliament, the bill has seemed to receive considerable push back from both the citizens of the country as well as some lawmakers who felt the law was passed in an unconstitutional manner. Political dynamics aside, the bill has some important implications for the country and provides another datapoint for crypto enthusiasts on the viability of crypto as a widely adopted currency.<\/p>\n\n\n\n

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Map of the Central African Republic in Africa. Source: https:\/\/www.hrw.org\/africa\/central-african-republic<\/figcaption><\/figure><\/div>\n\n\n\n

What is Legal Tender<\/strong><\/p>\n\n\n\n

To understand the implications of the bill on the CAR we first need to understand what it means for a currency to be legal tender.<\/p>\n\n\n\n

In any country, the governing body of the country must declare which currency or currencies the country and its citizens will legally accept. The country doesn\u2019t have to be the producer of the currency in order to declare it legal tender but declaring a currency to be legal tender requires citizens and institutions of the country to accept said currency as a suitable medium of exchange.<\/p>\n\n\n\n

For the CAR, this bill now requires all its citizens and institutions to be able to exchange bitcoin to settle all kinds of transactions within the country. If this already sounds extremely complex to execute, it becomes even more dizzying when you look at the supporting infrastructure for this change.<\/p>\n\n\n\n

In the CAR, approximately 31%<\/a> of its population have mobile connection, approximately 16%<\/a> have access to electricity, and approximately 11%<\/a> have access to the internet. With the CAR being one of the least developed countries in the world having over 60%<\/a> of its population living in poverty, the concept of bitcoin being a nationally accepted currency seems to many more aspiration than realistic.<\/p>\n\n\n\n

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The Central African Republic adopted Bitcoin in disregard of a decades-old agreement on a common currency with five of its neighbors, a regional monetary authority says https:\/\/t.co\/Bwz0PH6CP8<\/a><\/p>— Bloomberg (@business) May 10, 2022<\/a><\/blockquote>