Well, it’s done. The Central African Republic has voted to adopt Bitcoin as an official currency. Responses to the idea are mixed, which is natural for such new tech when breaching into the mainstream, especially on a national level. If you’re interested in the chance to buy Bitcoin, click here. Or read on to find out what CAR is up to and if there are any comparisons to be made in other countries.
What is CAR doing?
The Central African Republic has embraced Bitcoin as a legal currency, which means its citizens can use Bitcoin alongside its national currency of the CFA franc.
The bill was unanimously agreed among CAR lawmakers and was signed into law by President Faustin Archange Touadera, making the country the second in the world to embrace Bitcoin after El Salvador. The bill covers smart contracts, blockchain technology, and all electronic transactions, and says that cryptocurrency exchanges will not be taxed.
Is this a sign of things to come?
The Central African Republic might not be alone in their decision to adopt Bitcoin into the legal tender fold. A few other countries have taken a stab at embracing cryptocurrency on a national level, with varying degrees of commitment and varying degrees of success.
The famously firm Chinese government didn’t tell anyone what they were up to when they put out a blanket ban on crypto trading, causing a lot of panic and even “panic selling” amongst its citizens. Elsewhere, there was speculation, and finally the Chinese digital currency was launched. Named everything from e-CNY to DC/EP ande-RMB, the common folk call it digital yuan, and isn’t even nationally used yet. The concept is launched, but it is very, very slowly being rolled out to the masses.
Crucially, this coin removes the decentralized idea of cryptocurrency by having every transaction run through the People’s Bank of China. For this reason, and more, it’s not considered a cryptocurrency, it has nothing particularly new to bring to the table and it’s not even fully functional. It seems like China wants to make sure every little detail is well in place before they commit.
In February of 2022, it was announced that India was going to follow suit. Moving a lot more swiftly than China, the country shut down any and all crypto trading and swiftly introduced the digital rupee. The move was announced in February, with plans to establish the digital rupee this year, but as of May 2022, there has been little said about the move.
India’s finance minister, Nirmala Sitharaman outlined the plans in her annual budget speech, saying that the digital rupee will be embraced alongside the current national rupee, for a more easing of national currencies. She mentioned that there is to be a 30% tax on income from digital assets, that taxes for all other transactions would be deducted at source and that the government is aiming for a more efficient and cheaper currency management system.
As attempts to incorporate digital currencies go, this seems very middle ground and very promising. India is the third largest economy in Asia, which makes for a very big guinea pig to test out if crypto can work on a grand scale.
El Salvador was the first to embrace Bitcoin in particular, with the country’s relatively young president making some …interesting moves in order to procure Bitcoin as the national currency.
Like something straight out of the Supervillain's Playbook, El Salvador’s President Bukele quickly moved his country from being simply the first to use Bitcoin as legal tender but went on to establish his own “Bitcoin City” at the base of a volcano. The Conchagua volcano, to be exact.
Tastes in living conditions aside, there were mixed reactions from this move, ranging from authorities like the International Monetary Fund (or IMF) asking as late as January of this year for the president to reverse his position, to general hilarity at the situation.
In March, it was reported that the experiment wasn’t going well. Six months into the endeavour, the growing pains are starting to get really painful. There is only one ATM, too far away, technical issues matched with crypto’s policy that every transaction is final meant people were meaningly losing money, and the customer service team was of no help.
However, these growing pains come with any new piece of technology and have to be honed and kneaded into something that works. Remember the first Apple Macs? They were a joke. Practically a piece of plastic with a YouTube video simulating software. Facebook started as a dating site for nosey Harvard students. Sometimes a good idea is just a bad idea that needs work.
From these examples, we can deduct that the Indian way of doing things is probably for the best. The famously hot headed El Salvador president went all in and found out that he hadn’t planned well enough for the predictable problems that come with introducing new tech to the mainstream. India’s citizens, on the other hand, have got time to get used to the concept and have avoided China’s famed iron fist on any other option.