So much so that the only state other than El Salvador to do so was immediately suspected of wanting to facilitate shady deals while the regime was under the wrath of the UN, Western capitals including Paris, and international NGOs. who accuse him of handing over the Central African Republic to Russia and the “mercenaries” of the sulphurous Wagner, accused of “plundering” its resources in exchange for military support against the rebels.
Moscow has been under international economic sanctions since the invasion of Ukraine, and Bangui has been constantly complaining about the UN arms embargo since 2013.
On April 28, President Faustin Archange Touadera, to everyone’s surprise, announces that the parliament of this very poor country in Central Africa has passed a law that “regulates all transactions” with cryptocurrencies and makes bitcoin the “base currency”. franc.
All payments in digital currency are allowed, up to taxes.
Its practical application seems highly hypothetical in a country of 5.5 million inhabitants, of which only 15% have access to electricity – even the capital Bangui has daily long blackouts – and 10% to the internet, according to the World Bank.
-“What is it ?”-
In front of one of the few ATMs in the city powered by a generator, the legalization of bitcoins is perplexing.
“What?” asks Sylvain in his thirties in line. “I don’t know what cryptocurrencies are, I don’t even have the internet,” Joel laughs in front of his little vegetable shop.
“We are going to educate the public and will soon switch to fiber, and a weak internet connection is enough to buy cryptocurrency,” government spokesman Serge Ghislain Jory told AFP.
Even among the few businessmen who have the means, the knowledge and the technology to use them, the law leaves you speechless.
“I’m not interested in bitcoin here, we don’t have the infrastructure, we don’t have the knowledge to start this adventure, we don’t have a cybercrime unit to guarantee security,” explains a businessman from Bangui, who requested anonymity, by phone, adding: “there is and other priorities such as security, energy, access to water, internet, road construction…”
“If bitcoin can facilitate certain transactions, it’s a strange choice as a common means of payment” in such a country, says Usman Jacques Mandeng, a professor at the London School of Economics and Political Science.
States that accept another currency usually choose a more stable currency than their own (US dollar, euro), the price of bitcoin fluctuates a lot.
– Volatility –
“Bitcoin’s excessive volatility results in fluctuations in savings, consumption and household wealth if the cryptocurrency is adopted,” warns Ganesh Vishwanath-Nastraj, a professor at Warwick Business School.
“Currently, there is an agreement process between the six countries of the Economic Community of Central African States (CEMAC), anti-money laundering authorities and regulators to pass laws on cryptocurrencies,” but “we have not been notified of the decision by Bangui,” — emphasizes Didier Lukaku, Regulatory Director of the Central African Financial Market Supervisory Commission (Cosumaf).
Therefore, Bangui surprised everyone with the inconsistency of legislation allowing the use of digital currency in a state at war and almost bankrupt, which can neither feed its population without international humanitarian assistance, nor fully pay its civil servants without foreign donors.
“The context with systemic corruption and a Russian partner under international sanctions is suspicious,” Thierry Vircoulon, Central Africa Specialist at the French Institute of International Relations (IFRI), analyzes for AFP, adding: “Russia looking for ways to get around international financial sanctions requires caution.” .
“President Touadéra has turned the Central African Republic into a safe haven for transnational organized crime”, and “individuals are involved in money laundering and trafficking in natural resources, drugs, weapons…”, the American non-governmental organization The Sentry, which specializes in tracing, already wrote in October 2020. “dirty military money”, referring, in particular, to “Wagner and other Russian networks”.
However, International Monetary Fund (IMF) managing director Kristalina Georgieva recently said that “there is no convincing evidence that digital money can be used to circumvent” international sanctions in general.