Myth of Money: CAR, First African Country to Adopt Bitcoin as Legal Tender
Welcome to this week’s edition of Myth of Money, a weekly newsletter on the digital asset markets read by 12,000+ investors.
Disclaimer: The following is not intended as investment advice. Do your own research.
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.
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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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