The Central African Republic follows in the footsteps of El Salvador and adopts bitcoin as a means of payment: can it become a paradise for cryptocurrencies?

Last week, the Central African Republic proclaimed the use of bitcoin as a reference and legal circulation currency, with the same rights as the national fiduciary currency.

“The Central African Republic is not only the first country in Africa to adopt bitcoin as its reference currency, but it is also the first in the world to unanimously adopt a bill governing cryptocurrency,” said a presidential statement.

The document details that the objective is to “generate prosperity” for fellow citizens and ensures that the republic will be among “the most courageous and visionary countries in the world”. He also highlights that the African nation “fully understands” the importance of blockchain technology and that the authorities intend to legislate on it.

What does the law say?

The legislative proposal for the adoption of bitcoin was unanimously supported. The step makes the cryptocurrency a legal form of payment, on equal terms with the Central African CFA franc, the country’s official currency.

According to the law, the exchange rate between both currencies will be freely determined by the market. The enacted rule allows use cryptocurrencies to pay taxeswhile determining that the purchase/sale or exchange of cryptocurrencies is exempt from taxes.

The law obliges the ‘miners’ to declare all your earningsand establishes that all types of income are taxable.

Likewise, it creates the National Agency for the Regulation of Electronic Transactions (ANTE, for its acronym in French), to control all operations in the field.

reviews

The initiative has provoked drastically different reactions. Economist Yann Daworo noted that the measure should make various financial procedures simpler. “Businessmen will no longer have to walk around with suitcases [llenas] of CFA francs, which would have to be converted into dollars or any other currency to make purchases abroad,” Indian a la BBC.

However, various experts were not encouraged by the measure adopted by the authorities of the country, which is considered one of the poorest and least economically developed in the world. The Central African Republic has large reserves of gold, diamonds and valuable minerals, but according to World Bank data, approximately 71% of its residents lived in 2020 below the poverty line, pick up the CNBC.

In that context, David Gerard, who has been following developments in the field of digital currencies for years, stated that Internet coverage in the African…

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