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By Jeff Benson
Central African Republic.
The Central African Republic (CAR), announced today that it has adopted Bitcoin as legal tender. It becomes the second country, after El Salvador, to make the move.
The official Facebook account of the presidential office this morning posted that President Faustin Archange Touadera signed the bill into law after it was unanimously passed by the National Assembly.
Bitcoin will serve as the national currency alongside the Central African CFA franc (XAF), a regional currency that is backstopped by France and also used in Cameroon, Chad, Congo, Equatorial Guinea, and Gabon.
If you're thinking that this move is to battle inflation, XAF actually has a lower inflation rate than the U.S. dollar. The latest figures put it at about 4.8% annually, though it's fluctuated between -3 and 12% over the past five years.
While the official announcement touts the importance of the milestone, it's short on specifics.
AFP, akin to the Associated Press of the French-speaking world, translated presidential chief of staff Obed Namsio as saying: "This move places the Central African Republic on the map of the world's boldest and most visionary countries."
It joins El Salvador in the group of Bitcoin-adopting nations. In June 2021, President Nayib Bukele pushed through currency reforms that saw BTC become legal tender alongside the U.S. dollar in the central American country. The transition went into effect in September, with assistance from its Bitcoin wallet partner, Strike.
#DecryptLIVE: Bukele and Beyond: Crypto in Latin America
Decrypt EIC Dan Roberts welcomes Laura Angel (in Mexico City), Jose Lanz (in Brazil), and contributor Mathew DiSalvo (in Colombia) to talk El Salvador and Nayib Bukele, as well as zoom out and examine the broader LatAm crypto landscape these days.
Bukele has since made plans to harness El Salvador's geothermal energy to mine Bitcoin as well as sell Bitcoin-backed bonds, the latter of which has been put on hold due either to lack of interest or the macroeconomic situation, depending on the source.
Less is known about the CAR's plans for cryptocurrency—or the government's ability to translate the bill into reality. One of the world's poorest countries, the Central African Republic is heavily reliant on diamond exports, agriculture, and foreign aid. It's also politically unstable. A civil war in the early 2010s led to the dissolution of the government and a failed state. Touadéra became president in 2016 after a new constitution was created.
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