Yes, they actually did.
This massive news had been initially overshadowed by some conflicting reports about whether it was true or not.
When the story first broke there was some confusion. This seems to be because:
- The local article covering this was written in French.
- There seems to be very little information online and on Wikipedia about the structure of the government of the Central African Republic, so at first it was difficult to confirm the details.
- Conflicting articles were written by different media outlets.
The News Cycle
It all started on April 23, when a headline from Forbes Monaco covered this, stating: “First African Country Adopts Bitcoin Currency.”
However, this was not picked up by the Forbes main site, nor other U.S. mainstream financial news outlets such as Bloomberg, CNBC or the Wall Street Journal.
I excitedly announced it on Twitter, and almost had to eat crow:
JUST IN: The Central African Republic 🇨🇫 has adopted #Bitcoin as a payment currency. The National Assembly unanimously adopted the bill to help put the country’s plan for economic recovery and peacebuilding on track.
— Alexandre Lores 🇺🇸🇨🇦🇨🇺 (@alexandre_lores) April 24, 2022
One of the largest crypto media sites, CoinTelegraph, did cover the news but was a bit more cautious in their headline: “The Central African Republic reportedly passes a bill to regulate crypto use”.
One news website even contested that it was false and tried to throw Forbes and CoinTelegraph under the bus.
Finally, this got cleared up today as Bitcoin Magazine and other major news outlets reported on this massively bullish news.
It is now clear that two separate events occurred:
On April 23, the National Assembly voted in favor of the bill.
On April 27, President Faustin Archange signed the bill into law.
This is massive – following El Salvador, the Central African Republic is the 2nd nation to officially add Bitcoin as legal tender.
So now what? Let’s take a look at this nation and see how this move changes the game.
Central African Republic
The Central African Republic (C.A.R.) is rich in natural resources such as minerals, uranium, crude oil, gold, diamonds, cobalt, lumber, hydropower and has large quantities of arable (good for farming) land, per the CIA World Factbook.
Despite this, it is ranked among the poorest ten countries in the world in multiple world rankings. Annual GDP per capita is 4th worst in the world, at under $1,000 per person, according to World Population Review.
To make matters worse, unlike most countries, C.A.R. doesn’t even have a central bank and their own currency. A former French colony, they still are under financial control by the Treasury Department of France through the CFA Franc.
Based on their economic situation, it seems that their government officials are not satisfied with the Bank of France’s services.
The CFA Franc
The CFA franc is the currency for these 14 African nations, which happen to be some of the poorest in Africa:
- Benin
- Burkina Faso
- Guinea-Bissau
- Ivory Coast
- Mali
- Niger
- Senegal
- Togo
- Cameroon
- Central African Republic
- Chad
- Equatorial Guinea
- Gabon
- Republic of the Congo
The CFA franc is a currency that was created in 1945 and is backed and controlled by the French Treasury and Bank of France. Originally pegged to the franc, It is now pegged to the Euro at a rate of 655.96 francs per one Euro.
What’s the trade-off? In return, France controls 50% of their foreign exchange reserves. On a personal level, if you are an American and you send another American a bankwire, it goes via the bankwire system which is controlled by the Fed.
If you are in any of these countries, the currency and digital banking network it goes via and is controlled by the Bank of France.
Extreme poverty is one reason to look for alternatives.
Bitcoin
C.A.R. lawmakers unanimously approved a bill legalizing the use of cryptocurrencies in the country and making bitcoin and the CFA franc legal tender. President Faustin Archange Touadera then signed the measure into law, his chief of staff Obed Namsio said in a statement.
The C.A.R. “is the first country in Africa to adopt bitcoin as legal tender,” Namsio said. “This move places the Central African Republic on the map of the world’s boldest and most visionary countries.”
This statement was posted on the President’s Facebook account:
The bill has one aim to establish a favorable environment for the financial sector that meets the needs of the profession and all economic actors. Another aim of the bill is to establish a legal structure to regulate cryptocurrency and the crypto-related businesses like exchanges.
The Minister of Digital Economy, Gourna Zacko highlighted the economic independence the country and individuals can now experience for the first time:
“With crypto-currency, there is no more control of the Central Bank. You have your money, you send it to an investor for a business, you receive it in any currency, you can dispose of it in Dollar, Euro, CFA, or Naira”.
Conclusion
To say that this is bullish news is a massive understatement. Zoom out and consider the geopolitical and macroeconomic situation on our planet.
As nation states flex their censorship muscle, smaller nation states will look to decentralized alternatives. Individuals will look to decentralized alternatives as well. Bitcoin is a logical solution for many third world nations and for many individuals seeking financial freedom.
The C.A.R. was the second nation-state to adopt bitcoin as legal tender. It will not be the last.
Now consider the limited supply of bitcoin: 21 million. In fact, it’s even less than that if you take into consideration an estimated 3.7 million lost bitcoin that will never be recovered.
What’s my investment strategy regarding bitcoin?
Bitcoin crushed every other asset class in the past decade, and it will crush every other asset class in the next decade.
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This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. The author of this article may hold assets mentioned in the piece.
