Why the Central African Republic adopted Bitcoin

The Central African Republic’s decision to adopt Bitcoin as legal tender came as a surprise to many, but the government argues that it will secure an independent financial future for the country, as the BBC’s Damian Zane and Guy Bandolo report.

The president seemed to be following the Elon Musk style of cryptic cryptocurrency tweets.

Under the teasing heading “More to follow” CAR President Faustin-Archange Touadéra typed “Vires in Numeris” – a Latin motto meaning “strength in numbers” that has been associated with Bitcoin. Then came his nation’s motto.

This was shared with the world a month after the CAR became only the second country, following El Salvador, to adopt Bitcoin as legal tender.

The mineral-rich nation is ranked as one of the poorest in the world – a situation complicated by a near-decade-long civil war which has devastated much of the country. The government has recruited the Russian mercenary Wagner group to help in its fight against rebels.

The CAR’s Bitcoin announcement left many scratching their heads and some wondering if it had more to do with a political shift away from France and towards Russia.

There has certainly not been a sudden explosion in the capital, Bangui, of businesses such as shops or cafes accepting Bitcoin as a means of payment.

According to an estimate from 2020, nine out of 10 Central Africans do not have access to the internet – a prerequisite for using Bitcoin.

That, along with a patchy and unreliable electricity supply, led some to question whether the CAR was the right country to test the theory that cryptocurrencies were set to replace traditional forms of money.

The initial decision, announced on 27 April, was accompanied by little explanation except that it would open up “new opportunities for our country”.

The “more to follow” that President Touadéra was referring to in his May tweet was the announcement of a project called Sango – named after one of the country’s official languages.

This “visionary” plan would create “a fantastic opportunity for anyone who believes in crypto investing”, according to a government press release.

However, the website that the press release encouraged people to visit to find out more is opaque to say the least.

To go on an investor waiting list, the visitor is encouraged to sign up to receive a “secret code”.

The code provides access to a flashy slide presentation that declares that the CAR wants to build the “first legal Crypto Hub recognized by a country’s parliament, that welcomes businesses and attracts global crypto-enthusiasts”.

Sango is a “Crypto Island… the first island in the metaverse that is backed by reality”.

The people behind the presentation used a lot of “big words” but “the document was not very clear on exactly what they want to do”, says Stone Atwine, a crypto-specialist who runs digital financial services company Eversend.

Among the jargon seems to be a plan to allow people to invest in mining and other industries using Bitcoin and a promise that no income or corporation tax will be charged.

Mr Atwine believes that this could have potential as “a lot of cryptocurrency enthusiasts are looking for great places to build where things are legal”.

The CAR has significant deposits of diamonds and gold, as well as other minerals, and Bitcoin is being seen as an easier way to attract investors to the country.

“Impenetrable bureaucracy keeps us stuck in systems that don’t give us the ability to perform. The solution was to rethink our economic philosophy,” President Touadéra said in reference to the Sango project.

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