Myth of Money: CAR, First African Country to Adopt Bitcoin as Legal Tender
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It seems that Africa has gotten its own El Salvador.
The Central African Republic approved the use of Bitcoin and other cryptocurrencies as legal payments. On April 21, the Parliament met in a plenary session and unanimously adopted a bill governing cryptocurrency, making it the first African country to adopt Bitcoin as a means of payment currency.
According to the Worldbank:
The Central African Republic remains one of the poorest countries in the world and is grappling with numerous human capital challenges. It ranks near the very bottom of the UN Human Development Index (188 out of 189 countries in 2020), which could present devastating consequences for its future generation. The country does have some important natural resources, with timber and diamonds dominating exports. However, transportation and the electrical infrastructure is extremely limited. The government has been unstable for decades, suffering repeated military coups. Although cease-fire agreements were reached with multiple rebel groups in 2011, the agreement has yet to be fully implemented and parts of the country remain outside the control of the government. Endemic poverty and weak governance have contributed to a dire health situation, with very high maternal mortality and low life expectancy. Access to education is also limited, particularly for girls.
How can Bitcoin solve some of these issues?
Citizens may now use Bitcoin for payments and businesses are obliged to accept payment for goods and services. Taxes may also be paid in Bitcoin. With banking infrastructure limited for most citizens in the country, a peer-to-peer cryptocurrency that can be made available to anyone with just a smartphone and an internet connection may present the most reasonable alternative.
High unemployment in African countries like CAR, means young people are skirting traditional sectors and exploring new ways to make money. With the rise of cryptocurrencies, young entrepreneurs can work remotely and accept payments in Bitcoin and other digital assets.
Adoption of Bitcoin can also help protect the country against currency instability and hyperinflation. When the Zimbabwean dollar skyrocketed in 2015, Zimbabwean citizens turned to Bitcoin.
We have already seen the success of Bitcoin adoption in El Salvador, with rising tourism and influx of industry. If CAR is the first of a wave of African countries to adopt Bitcoin, we can expect a material economic shift across the continent.
This Week By the Numbers 📈
Markets have begun to correct across the board as the Fed teased another rate hike.
Top Stories 🗞
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Warner Recorded Music (WRM) has enlisted Linkin Park co-founder and music tech pioneer Mike Shinoda as Community Innovation Advisor. In this first-of-its-kind post, Shinoda will work closely with Warner Music’s leadership and business development teams to help shape the company’s artist-centric approach to Web3. With Shinoda’s support, WRM will continue to partner with artists to bring their creative visions to life and build communities across new platforms, products, and experiences, while exploring new revenue streams.
Elon Musk says he has gathered up more than enough cash to follow through on his bid to buy Twitter. In a new SEC filing Thursday morning, he confirmed that he has secured the full $46.5 billion funding in commitment letters from Morgan Stanley and other financial institutions. Musk also floated that he may explore a “tender offer” to buy the social network in an effort to circumvent Twitter’s poison pill defense to his first offer. A tender offer would appeal directly to a company’s shareholders, rather than its board. If Musk decides to officially pursue his Plan B, he would essentially be offering to buy each Twitter shareholder out at $54.20 per share. If he convinces enough shareholders to sell to him, he would eventually gain a controlling interest in the company. Tender offers can be associated with a hostile takeover, because they bypass the company’s leadership and appeal directly to shareholders.
Thank you for reading this week’s edition of the Myth of Money.🚀
Until next week,
By Tatiana Koffman
Hi there and thanks for reading. If you stumble upon my newsletter, you will notice that I write about money, economics and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital and Cryptocurrencies. I believe in empowerment through closing the financial education gap and creating equality of opportunity for the next generation.
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