Bitcoin has been legalized as a legal currency by an African country – second only to El Salvador 2022-04-28 06:40:00

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Bitcoin is a volatile asset, and it is known to swing more than 10% higher or lower in a single day.

Jacob Borzeki | Norfoto | Getty Images

The Central African Republic has become the second country in the world to adopt Bitcoin As the official currency after El Salvador I took the same step last year.

Lawmakers in the Central African Republic’s parliament have voted unanimously on a bill legalizing bitcoin and other cryptocurrencies, according to a statement from the presidency.

Bitcoin will be considered legal tender alongside the regional CFA franc.

Obed Namseo, Chief of Staff of President Faustin-Archange Touadera, described the move as “a decisive step towards opening new opportunities for our country”, he said. Reuters.

The Central African Republic is rich in diamonds, gold and other precious metals, but it ranks as one of the world’s poorest and least developed countries.

According to the World Bank, nearly 71% of the Central African Republic’s 5.4 million people were living below the international poverty line in 2020.

This landlocked country in the heart of Africa has been plagued by years of political instability and violence.

“The big question is who gets to rule on cryptocurrency,” David Gerrard, a freelance author who has followed crypto closely over the years, told CNBC.

“Internet coverage in the Central African Republic is 11%. The government may have been told that this would spoil payments in the country, but it is not clear how.”

The move to consider Bitcoin legal tender has been praised by the crypto community, and hailed as another step towards mainstream adoption of cryptocurrencies.

Read more about cryptocurrencies from CNBC Pro

But it can also be considered controversial. There were protests in El Salvador after the country introduced the Bitcoin law, and the country faced criticism from the International Monetary Fund.

The International Monetary Fund has urged El Salvador to abandon bitcoin as a legal currency, raising concerns about the risks it poses to financial stability and consumer protection.

Bitcoin is known as a volatile asset, which raises questions about its role as the standard method of payment. It was last traded at around $39,686 on Thursday, down 6% in the past 24 hours. The cryptocurrency has lost about 42% of its value since hitting an all-time high above $68,000 in November.

Several Western governments have sounded the alarm about Russia’s possible use of cryptocurrency to evade sanctions amid the country’s invasion of Ukraine.

CAR is Close ally of Russiawith the presence of Russian mercenaries Provided direct assistance For the government, according to the United Nations.

Experts noted that this move could help small countries such as the Central African Republic reduce their dependence on the US dollar in global trade.

Ranso Salovara, CEO of crypto platform Likvidi, noted that the dollar has been the global oil currency since the 1950s.

“Oil dependence is a major issue now, because of Ukraine and SWIFT Banking BanSo the unstoppable global cryptocurrency like Bitcoin can really shine.”

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