On April 28, President Faustin Archange Touadéra had, to everyone’s surprise, announced the vote by Parliament of a law which “governs all transactions” in cryptocurrencies and makes bitcoin a “reference currency” alongside the CFA franc. .
If the law has come into force, its application remains complicated and the vast majority of Central Africans still do not seem to understand all the contours, this while the authorities are trying to promote bitcoin.
Read also: Central African banks are wary of the arrival of bitcoin
A choice to bail out the state coffers?
To make his project more concrete, the Head of State went to Dubai to oversee the launch of an electronic mining company. “Mining” which designates these complex calculations used to create bitcoin and authenticate transactions is a very energy-intensive process and the Central African Republic does not have the necessary infrastructure for this operation. It is indeed in Dubai that the electronic money mining company should be located.
This mining company will provide a service to the cryptocurrency network in exchange for compensation. The Central African authorities seem to hope that the adoption of bitcoin will help bail out the state coffers.
The Central African authorities seem to hope that the adoption of bitcoin will help bail out the state coffers.
This is despite the extreme volatility of the digital currency which can experience variations, up or down, of more than 10% in a single day. Fluctuations which do not help the civil servants or companies which would be paid with this currency.
The law passed by parliamentarians which governs all cryptocurrency transactions makes bitcoin a “reference currency” alongside the CFA franc. All payments in digital currency, including taxes, are therefore authorized in the Central African Republic.
Its application, which seemed hypothetical from the start in a country of 5.5 million inhabitants, of which only 15% have access to electricity and 10% to the Internet, according to the World Bank, is already coming up against obstacles.
Read also: RCA: the adoption of bitcoin considered rushed by some
The Central African Banking Commission (CBAC) specified in a press release that only the CFA franc is the authorized currency for keeping the accounts of institutions subject to it.
The CBAC prohibits these establishments and their technical partners, “in the context of payment services, from exchanging or converting, settling or hedging in currency or in CFA francs transactions relating to cryptocurrencies or having a link with them. “.
A decision that risks complicating the task for the Central African authorities, the CBAC being the supervisory body for all credit institutions and microfinance institutions in the Economic and Monetary Community of Central Africa.
Before the CBAC, it was the African Development Bank which, according to some media, had to suspend the financing of projects in the Central African Republic, in particular because of the unstable economic situation in the country, which is not reassuring. A feeling that the adoption of bitcoin as a reference currency has only reinforced.
A few days ago, the Central African Minister of Finance, Hervé Ndoba, warned of the alarming state of the country’s public finances and announced cuts of 40% to 60% in the budget of certain ministries.