Central African Republic wants to regulate cryptocurrencies not adopt Bitcoin

The Central African Republic has legalised the use of cryptocurrencies in its financial markets, according to Radio France Internationale.

Contrary to reports of Bitcoin becoming a legal tender making rounds over the weekend, the real news is that crypto would be regulated and its use would be allowed in the financial markets of the country. 

On April 20, Justin Gourna Zacko, the Minister of Digital Economy, Post and Telecommunications of Central African Republic introduced the cryptocurrency bill which was approved unanimously by all lawmakers in the parliament after repeated protests from the opposition.

“As an individual, sending money to the Central African Republic from elsewhere becomes very difficult and also receiving money from the Central African Republic is complex because it is controlled, it goes through the Central Bank. With cryptocurrency, there is no more control of the Central Bank. You have your money, you send it to an investor for a business, you receive it in any currency, you can dispose of it in Dollar, Euro, CFA, or Naira.” said Zacko.

He adds that, “there are so many advantages in cryptocurrencies, but first we would have to have the legal frameworks to allow any Central African also benefit from this possibility of transferring money and receiving money,” 

However, the bill provoked strong reactions from the country’s opposition party. Three members of the commission that studied the bill submitted a letter voicing strong reservations. They specifically cited crypto’s potential use for money laundering, tax evasion, and fraud.

According to the RFI, support for the law is not unanimous.

“In a letter, the opposition deputies Dologuélé, Ziguélé and Ngakola, members of the commission who studied the bill, dissociated themselves from the final report. They expressed “strong reservations.”

The operation will promote, according to them, “the laundering of dirty money, will make the bed of tax evasion and fraud.”

They are also concerned about the impact of such a measure on donors. Such a project “can only arouse suspicion” and risks compromising “the disbursements of major institutions.”

But, Justin Gourna Zacko highlighted how the Bank of Central African States (BEAC) slows down remittance. The BEAC controls the monetary policy of several central African states including CAR, Cameroon, Chad, Equatorial Guinea, Gabon, and the Republic of the Congo.

When the approved bill becomes a law, traders and businesses would be allowed to make payments and pay taxes in crypto through licensed entities. The law aims to create a friendly environment for the growth of the crypto sector in the country. 

There are also provisions for crypto-economic offenders who could be jailed for up to 20 years and fined between 100,000,000 to 1,000,000,000 Financial Community of Africa (CFA) francs. 

One of the perks of this for the people of CAR is that they would have access to digital currencies other than the local currency – FCFA while being protected by the law.

There will also be financial transfers abroad and within the nation without the involvement of any bank when the law comes into effect. 

Central African Republic x Crypto in Africa

As the cryptocurrency market expands across the world and its assets become more accepted as a valid form of payment, most African nations have adopted a slightly different approach. 

Several countries in the region, including Nigeria and Kenya, have chosen to ban crypto transactions or warn their banks to avoid them. At the same time, others like South Africa are promoting digital asset transactions.

Despite the political and socio-economic hurdles that crypto faces in Africa, it continues to grow in popularity. According to a report Technext published last month, crypto users in Africa surged to 2,500% in 2021. 

CAR making regulation moves and incorporating crypto into their financial systems is a significant move, and will aid an increase in the country’s GDP.

Going forward, there is a need for other African governments to find a middle ground that ensures that locals can reap the benefits of digital asset transactions, while risk mitigation and compliance are prioritized.