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Even as cryptocurrencies keep growing both in variety and use, there has always been uncertainty about their penetration in Africa. Pessimists have often painted Africa as being highly reluctant of not apprehensive about technologies, especially when it comes to money matters. But today, the Central African Republic has just broken the glass ceiling by becoming the first country in Africa to accept bitcoin as a legal national currency.
In the past, a dark cloud has always hung on the possibility of successfully making African countries to adopt crypto as a legal tender. As of now, countries such as Kenya and Nigeria have exemplified themselves in crypto trading but lacking in accepting them as a legal tender. So Central African Republic may well go down in history as African country that is more receptive of budding financial technology in the global scene.
The Central African Republic has surprisingly joined into the fray of countries that have adopted crypto as a legal tender. It was first El Salvador, the small island county that took the lead in bitcoin acceptance as a legal tender and now an African country. It was unlikely that small countries in some of the most conservative parts of the world would be first to recognize these new financial technologies.
The pseudonymous miners of first bitcoin, Satoshi Nakamoto had envisioned to use this digital money for completing transactions and a security against inflation. If this dream is anything to go by, it is then safer to argue that the unexpected countries of the world is taking a lead.
As opposed to various developed countries including USA, Canada, UK and in Europe where people largely use crypto as an investment/stock, now Africa and the Central America are living up to the dream of making bitcoin a measure and exchange of value. You can expect that so many transactions will slowly but surely adopt bitcoin as a payment option.
For anyone with a particular interest in tracking provenance of bitcoin should labor to understand what prompted its entry into the Central African Republic. As is expected, the reasons for this unprecedented move could be a pointer to what may become normal for African countries to embrace crypto as a legal tender.
Over the years CAR has remained in the list of poorest countries despite its great mineral wealth that should have otherwise changed the situation. CAR is known for mineral endowments including diamonds gold and uranium worth billions of dollars that remain trapped and unexplored. Due to years of conflicts and factions of rebel groups, CAR is embroiled in decades of war.
The decision of the lawmakers in the Central African Republic to adopt bitcoin as a legal tender could have been motivated by a couple of enduring problems that have dogged the country.
Just like French former colonies, CAR has over the years relied on the French-backed CFA franc as its currency. This has only meant that the country’s fortunes or otherwise are at the behest of their bigger brother, France.
In a world that is fast growing out of colonial legacy and trying to chat own destiny, it is only expected that CAR wants to break away from the French dominance over its territorial integrity and economic prosperity. Liberalizing the currency market in CAR is a spot-on starting point. However, the jury is stil out there on how France is likely to respond to this move.
CAR has not benefited from its natural resource endowments. In fact, the country has been used as an example of a classical resource curse alongside the Democratic Republic of Congo. These are countries that have greatly demanded mineral wealth which are being fleeced away as the local wallow in poverty and remain embroiled in unceasing war.
France and Russia have often been accused of using their financial influence to entrench unfavorable mineral extraction agreements that only make the country poorer. So, bitcoin would mean that the country has access to global buyers who can easily pay for the minerals in bitcoin. This is a possible pointer to a new CAR if things happen as planned.
The adoption of bitcoin as a legal tender in CAR could just be a tip of the iceberg. While many have thought that Africa is slow to embracing technology, the reality is different and many more such surprises are bound to emerge. Companies that are seriously considering growth have in the recent decades forced on prioritizing entry into Africa because of its high population that provides market and its rich natural wealth. Crypto will surely find a proper home in the continent.
If anyone doubts the incredible leaning of Africa to technology then the establishment of the mobile money transfer system M-Pesa should be sufficient answer. We can only expect to see bitcoin alongside other altcoins gaining new grounds and becoming widely acceptable not only as an investment option but also legal tender.