The Central African Republic (CAR), a growing nation in the heart of Africa, has created a committee composed of 15 members to develop and pass legislation regarding the utilization of cryptocurrencies and tokenization within its borders.
Faustin-Archange Touadéra, the President of CAR, strongly trusts cryptocurrencies’ ability to bridge financial divides. He plans on establishing an encouraging business atmosphere backed by a legal structure for cryptocurrency use. The country’s crypto bill has been crafted by a 15-person committee representing five key ministries: the Ministry of Mines and Geology, the Ministry of Waters, Forest, Hunting and Fishing, the Ministry of Agriculture and Rural Development, the Ministry of Town Planning, Land Reform Towns and Housing, as well as the Justice Promotion/Human Rights & Good Governance ministry.
The CAR is one of six central African countries that share the CFA franc — a regional currency that is backed by France and pegged to the euro. Other members are Cameroon, Chad, Republic of Congo, Gabon and Equatorial Guinea.
Thierry Vircoulon, a specialist on central Africa at the French Institute of International Relations (IFRI) think tank, wondered if there was a link between the CAR’s close ties with Russia.
“The context, given systemic corruption and a Russian partner facing international sanctions, does encourage suspicion,” he said. “Russia’s search for ways to get around international sanctions is an invitation to be cautious.” El Salvador became the world’s first adopter of the pioneering virtual currency on September 7. The introduction was heavily criticised by the International Monetary Fund (IMF).
It warned of “large risks associated with the use of bitcoin on financial stability, financial integrity, and consumer protection” and with issuing bitcoin-backed bonds. Many regulators share those concerns, and other critics say that anonymised transfers using crypto are a perfect tool for traffickers and money laundering. India effectively outlawed crypto transactions in 2018, only for the country’s top court to strike down the ban two years later.
China’s central bank in September declared all financial transactions involving cryptocurrencies to be illegal. Huge swings in bitcoin’s price make it risky as a store of value and long transaction processing times make it impractical for small purchases. After a relatively calm 2020, the cryptocurrency has experienced wild swings in 2021, surging from under $33,000 at the start of the year, peaking at over $67,000, before returning to $35,000 in February.
It was down 1.5 percent at 1400 GMT on Wednesday, trading at $39,328.14 (37,293.7 euros). Despite reservations, there is also acknowledgement of the usefulness of digital currencies as a flexible monetary tool.
