The Central African Republic Makes Bitcoin A Legal Tender, Second After El Salvador

25. Apr 2022 Posted by Akolkar B on News

Looks as if the domino effect of Bitcoin adoption is already kicking in! The Central African Republic has become the first country from the African continent to make Bitcoin a legal tender as per the new draft law.

CAF’s National Assembly has unanimously adopted the bill legalizing Bitcoin payments as means of charting the country’s plan for economic recovery. CAF’s minister of digital economy, post services and telecommunications, Gourna Zacko, and the minister of finance and budget, Calixte Nganongo, submitted the draft law that talks about making Bitcoin a legal tender as well establishing the legal framework for crypto regulations.

Forbes reports: “The application of the legal-tender implies the acceptance of cryptocurrencies as a legal means of payment established through specific legislation. With cryptocurrencies, the Central African Republic is moving towards a new, avant-garde path of development and economic performance, a dynamic field which is popular among investors around the world and ever-present as full-fledged assets in the portfolios of the world’s largest financial players”.

The new initiative will help CAF to steer ahead its blockchain technology innovation while simultaneously building up its digital infrastructure.

Crypto adoption has been growing especially among countries with higher economic debts. Many of these countries see Bitcoin and digital assets as a way to reduce their debt burden and chart path of the economic recovery.

The Latin American country of El Salvador was the first to make Bitcoin a legal tender last year in September 2021. Since then it has been buying BTC and adding it to its country’s treasury. Besides, the government has also floated Bitcoin-volcano bonds leveraging the excess geothermal energy and swaying institutional players.

However. El Salvador’s Bitcoin adoption has received criticism from some of the top global financial agencies. The IMF has even asked the country to reconsider its bitcoin decision and drop the idea of it being a legal tender.

Now with the Central African Republic joining the bandwagon more countries might consider making similar move. Some Latin American countries like Mexico and Argentina have been already mulling about making Bitcoin a legal tender.