Edited by BellaRose Okojie
The Central African Republic has passed a law making cryptocurrency an acceptable legal tender and a mode of transaction in the country. This was announced by the office of President Faustin Archange Touadera on Wednesday. While this is not the first country to make this decision, El Salvador who first made crypto legal tender is still battling with it.
Making cryptocurrency a legal tender, a risk or a means to economic stability?
Is the Central African Republic (CAR) taking a risk, or are there measures on the ground to keep the economy stable? Due to the volatility of cryptocurrency, a country’s economy can’t solely rely on it as a legal tender. The President of the Central African Republic said that this move makes his country one of, not just Africa’s but, the world’s boldest countries. But is bravery all it takes?
A lot of countries have placed bans or restrictions on cryptocurrency to aid their economies and keep track of transactions performed within their borders. Cryptocurrency, at the moment is the currency of the future; it is digitalization at its peak. But at this moment, it appears too volatile to rest a country’s economy on. Plus, its decentralized nature puts government agencies on high alert as it serves as a threat to economic security.
Notably, the IMF has kicked against the acceptance of cryptocurrency as a legal tender, but more than a handful of CAR lawmakers voted in favour of the bill. Also, the office of the president said this was a decisive step toward opening up new opportunities for the country assuring that bitcoin will be considered legal tender alongside the regional CFA franc.
