Earlier this week, the Central African Republic adopted Bitcoin as legal tender, becoming the second country in the world to do so after El Salvador. However, according to Reuters, the government did not let its own central bank know about the abrupt arrival of the digital currency.
The central bank for the Central African CFA franc, the Bank of Central African States, claimed it had no knowledge of the government's plans before the announcement. Six countries use the regional currency, which is pegged to the Euro and backed by France.
At least half of foreign assets must be held by the French Treasury, according to the requirements of the Bank of Central African States. Detractors view this as a new form of French monetary imperialism throttling already struggling African economies.
And on the streets of the Central African Republic, opinions about the new currency do little to inspire confidence. "Bitcoin. What is it?!" Auguste Agou, owner of a timber company in Bangui, asked Reuters. "What can Bitcoin bring to our country?"
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“The big question is who the cryptocurrency ruling is for,” David Gerard, an expert on the crypto industry, told CNBC. “Internet coverage in the CAR is 11%. Perhaps the government has been told that this will bootstrap payments in the country, but it’s not clear how.”
There are myriad challenges looming ahead for the Central African Republic, which is among the world's most impoverished and conflict-ridden countries. The Central African Republic already faces low electricity and internet, along with equally low levels of knowledge about cryptocurrency.
The Central African Republic is noted for its gold and diamond-mining industries, but it has a dismal internet penetration rate, with only 11% of the population, or approximately 550,000 people, being able to come online last year, according to the Economist Intelligence Unit. Even more startlingly, a mere 14% of the population has electricity access and not even half the country has a mobile phone.
Chainalysis said it had zero information on the Central African Republic's crypto usage, prompting questions about how the country will implement this plan.
"Given the enormous barriers to adoption and risks associated with use, and seemingly limited upsides, we do not expect widespread adoption of cryptocurrencies in the country," Nathan Hayes, an analyst at Economist Intelligence Unit, told Reuters.