Shadow of Russia?

It became official since Wednesday, April 27, that the Central African Republic is the second country in the world, after El Salvador, to adopt bitcoin as a legal tender. Invoice Result Cryptocurrency control in the Central African Republic “Been voted” unanimous One of the deputies present at the National Assembly in Bangui on that day. Issued by President Faustin-Archange Touadera. Now, if you were to gather some information about this central African country, sandwiched between Cameroon, the Democratic Republic of the Congo, Sudan, and Chad, Wikipedia would tell you that the country’s official currencies are bitcoin and the CFA franc.

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In a series of tweets, Central African President Faustin-Archange Touadera expressed his happiness with the attention that such a decision has received, explaining that “ The law was enacted in the hope that it would be an opportunity for the economic and technological development of the Central African Republic “, Central African Republic. Ironically, the Central African Republic is the second least developed country in the world according to the United Nations and has been mired in a bloody civil war since 2013.

The recognition of bitcoin as a legal tender thus raises questions for many observers, even the opposition parties in Bangui. Martin Zegele, former prime minister and now opposition deputy, let it be known that ” Challenge this law before the Constitutional Council He adds that This law is a way out of the CFA franc by emptying the single currency of its essence (…), it is not a priority of the state, this approach asks: who benefits from the crime? “.

Some, like Philip Heerlin, an economist who specializes in monetary issues and author of The Practical Guide to Cryptocurrency Bitcoin: Understanding and Investing (Eyrolles), see it as an opportunity for the Central African Republic for economic development and a certain liberalization in exchange for the CFA franc, which is still pegged to the euro. “ Bitcoin as a legal currency can provide services to the population, especially immigrants from Central Africa who send money to the country He explains. Currently, they pass through specialized banks or operators that charge large fees, with Bitcoin fees much lower or even non-existent. Another interest for the country is that the development of bitcoin could make it possible to bank with a population that works almost exclusively with cash.

to cheat ?

The problem is, CAR is very little electrified. Of the 5 million citizens of the Central African Republic, only 15% have access to electricity, with a capacity of 30 megawatt-hours. For comparison, Senegal has a capacity of 650 MW, and 500 TW in France. Moreover, only 4% of the population has access to the Internet. Two basic parameters to be able to use Bitcoin. ” This could be the impetus for the development of electricity grids and the Internet ‘, wants to believe Philip Heerlin.

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Gregory Fanel, professor of economics at Grenoble School of Management, was not fooled. for him, “ This decision is purely symbolic, and will have little impact on the country’s economy “…and for good reason: if the use of bitcoin can allow the Central African Republic to free itself in the face of the dollar and international monetary institutions, then the country must still own bitcoins and thus be able to obtain them.” However, getting bitcoins has become a very complicated matter, and their number is limited. ‘ confirms the economist. However, there is another solution: mining. It is a matter of providing a service to said currency network in exchange for a monetary reward, in bitcoins for that. But for that you need a very good internet and a lot of energy. What the Central African Republic doesn’t really have. ” For all of this to work, people will need to be able to buy cryptocurrency. However, the conditions are not met, Thierry Vercolon, a specialist on Central Africa at the French Institute of International Relations (IFRI), agrees. All this has nothing to do with the interest of the population. »

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What is the benefit then? Since the announcement, many eyes have turned to Russia, a major ally of the Central African Republic since 2018. Contracts for the delivery of weapons and armored vehicles to protect President Faustin-Archange Touadera, Moscow is one of Bangui’s privileged partners, if not the only one. “ One possible path to this sudden adoption of bitcoin as a legal currency may be the desire to circumvent international sanctions that have been taken against Russia since the start of the war. Explains Thierry Vercolon, who also tends to try to outwit the Central African force.

The Central African Republic is a country that exports natural resources, denominated and billed in dollars, which means that when it wants to pay another country, it does so in dollars, Gregory Vannell confirms. However, since international sanctions were adopted against Russia and its exclusion from the interbank SWIFT system, this is no longer possible if it wants to trade with Russia. The solution is to use a “neutral” currency that escapes the control of international monetary institutions, including the Central Bank. Bitcoin is an unregulated and geopolitically neutral currency Philip Heerlin is convinced that cryptocurrency can take an important place as a reserve and transaction currency, especially for countries that want to free themselves from the dollar. At the end of March, Russia also floated the idea that countries could pay for gas in bitcoins. Provoking or winking, Central African Republic President Faustin-Archange Touadera announced on his Twitter account a few hours after the April 27 law was published: “ #Bitcoin is a global money. »

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