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The Central African Republic (CAR) has planned to use Bitcoin (BTC) as a reserve asset as part of the country’s efforts to use cryptocurrencies and blockchain technology as tools to support a weakened economy.
At the time of publication, the first cryptocurrency Bitcoin is trading above $21,000.
The Central African Republic’s decision to use the main cryptocurrency Bitcoin as part of its national reserves follows a policy aimed at legalizing BTC in the country. The country became the first jurisdiction in Africa to approve Bitcoin as legal tender back in April.
The National Assembly approved the proposal after two lawmakers, Digital Economy Minister Gurna Zako and Finance Minister Calixte Nganongo, drafted the proposal. Officials expressed support for the policy, and the bill received a unanimous vote in the Senate.
The CAR has added a project to legalize BTC with a project called Sango, a blockchain-based platform to support cryptocurrency adoption in the country. According to reports, Sango is a Bitcoin sidechain built by analogy with the Liquid Network.
Sango is preparing to launch on July 25 and is expected to function as a digital monetary system.
Adoption of Bitcoin in the CAR met with resistance from financial regulators
Although the adoption of BTC in the Senate of the Central African Republic received support, this move caused criticism from external bodies, which believe that this decision could jeopardize the economic stability of the country, and not save it.
As in the case of El Salvador, the International Monetary Fund has expressed concern and advised the CAR to consider taking a different path. The Bank of Central African States, a financial center serving six countries, including the CAR, has also opposed the adoption of BTC on a nationwide scale.
Author: Anton Zaitsev, Analyst at Freedman Club Crypto News
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