Topic: Central African Republic drops Bitcoin as Legal Tender (Read 277 times)

https://indianexpress.com/article/world/zimbabwe-digital-currency-backed-by-gold-8581834/
In Zimbabwe, the new tokens “will be fully backed by physical gold held by the bank” and will go into circulation on May 8, Reserve Bank of Zimbabwe Gov. John Mangudya said.
__
I am sure that rich people are smart and will buy physical gold instead of tokenized or buy real bitcoins. There is much more paper gold in the world than physical gold, so it is a big mistake to store tokens in a national bank that cannot cope with inflation.

Except Zimbabwe's economy is fixed, Bitcoin or gold will have little or no impact. The country is battling corruption, low agricultural productivity, and a shortage of power mainly triggered by the land reforms of Robert Mugabe. Using bitcoin or gold as a hedge against inflation will only favor the rich that has saving but the poor that are focused on survival will suffer the effect of inflation. I will not also advise any investor to consider the gold-backed token because it can be prone to corruption and manipulation which could lead to its collapse. However, if well managed it will help in reducing the overdependence of dollars as a legal tender and store of value in the South African country.

I think this is a blog post. I have tried to search for other richer sources to confirm but not seen fresh update on that repeal of first law on adopting bitcoin as legal tender.


Ethiopia is also making the move to go in with bitcoin but the unfortunate thing is countries that are not yet prepared are those initiating such move. Like the case of CAR with less than 10% of her population having access to internet facility was a project waiting to crash.

Thinking deeply, I think there are few reasons for the rush to throw in all in the bid to make bitcoin a legal tender and that is countries trying to think bitcoin will improve their sorry economic status and overnight land them into economic riches whilst they are still deep in corruption. CAR is one of the poorest countries in Africa with illiteracy rate and no prior inclination towards bitcoin by its youths and citizens.

Another reason for the rush for making bitcoin a legal tender is to have an financial escape route like we have seen in some was zone countries who are trying to escape some financial sanctions like Russia.

They're still accepting it, just not forcing people to do it as they would in case of a legal tender. I feel like poor countries shouldn't push it if they have very little tech savvy people. In places where you're scared of displaying your phone in public so you don't get robbed, you can't expect people to start paying with bitcoin.
That said, Mexico is making a move towards accepting bitcoin as we speak and this isn't the richest, nor the safest country, so it can be done and it's going to be done more often in future.
IMO a great first step is not to make it hard for those who want to accept bitcoin, give people some freedom and it will grow in its own pace.

https://www.coindesk.com/policy/2023/04/24/zimbabwe-to-introduce-gold-backed-digital-currency-report/
Zimbabwe to Introduce Gold-Backed Digital Currency: Report
The country's central bank wants people to be able to exchange Zimbabwe dollars for the gold-backed token so that they can hedge against the currency's volatility.
__
Zimbabwe is not far from the Central African Republic and they want to revive the gold standard, only gold will be paper or tokenized. What will the price of gold be in Zimbabwe after that?
Probably better to use bitcoin because the central bank token is not trustworthy.

You do have a point, but that's where it gets tricky... Since we're talking about a poor country, I'm going to assume most of them would prefer to keep a low profile due to various reasons ^{[e.g. risk of theft, taxes and etc...]}.

No wonder why it hasn't succeeded yet ^[SMH].
^{BTW, great find}

If I were to guess, I'd say it probably had something to do with how clearly it highlighted their stupidity.

Never thought I will be reading such, but I can only imagine that this could be an element of external factors at play!

And seeing the troubles the country is currently facing, I think CAR has been given these conditions of reverting their decision before the pay masters gift them with some kind of grant or something.... If not why would they drop bitcoin from being used as a legal tender asset???
Tbh there is more to this than meets the eye!

CryptoCity & Crypto Island in Bangui, Central African Republic’s capital
https://sango.org/#cryptoCitySection
Of course, it's going to be built on tokens that, well, are not selling! And what incentive you will have as an investor?


And how would they do this? Wishful thinking!
Nobody is going to invest in one of the poorest countries in the world that are one step away from a civil war just because they've legalized crypto.
Where are the returns from your investment going to come? Poverty is quite cheap and there are a lot of exporters, I don't think you can get too much for it!

Yeah, most likely infrastructure is not yet setup to CAR that's why adopting Bitcoin has failed. And the government should provide first the basic necessities like food, water and shelter before all other things.

Or maybe CAR was put into pressure by IMF and any other world bodies, just like what they did to El Salvador although President Bukele is not deterred by threats of IMF.

It's not the failure of Bitcoin though, just to be clear here. Maybe CAR was very quick to adopt and make it legal tender without any further studies on the effects of it in their country.

Apart from some infrastructural deficit and a high rate of illiteracy in the Central African Republic, there might be other factors that led to the dropping of Bitcoin as a legal tender. Poverty was one of the major challenges of that country. When citizens are focused on satisfying their essential needs and they don't even have savings, how will they embrace Bitcoin?

Another factor might be external influence. Some international banking and lending organisation like the BEAC and IMF may be mounting pressure on the government of CAR to reverse its policy on Bitcoin. President Faustin Archange Touadera is not as dogged as Nayib Bukele that withstood all the pressures.

I watched a few reports about CAR, they say that this country is very unsafe. A tourist can be robbed even in a hotel.
Investments come to a country when there are advantages for a faster return on investment. And when it is dangerous in a country and weapons are sold openly on the markets, not a single investor will go to such a country.There is nothing to discuss about tourism.

Well, I think the news has made as much of an impact as when they announced that they were adopting it as a legal tender: in a very limited way if at all.


Well, I hope they try to solve their problems and improve the lives of their citizens, they can always adopt it again in the future when hopefully the standard of living has increased and their citizens use new technology more widely.

When they first announced that they will make Bitcoin legal tender some of us were aware that of the fact that CAR is simply not ready for something like this, so them giving up on the idea is not a surprise at all. Central African Repoublic has deep issues that can't be simply solved with Bitcoin so I am actually glad that they will focus their energy on something more reasonable than trying this idea work in a country where majroify of people don't even have access to electricity.


They never really cared about that as all they did was riding the Bitcoin hype train during last bull market.

And once again, bitcoin isn't a benchmark that a country suddenly becomes a prospective business haven. Because business people will also take advantage of local human resources as much as possible if they're adequate.

I'm wondering what are the indications of successful bitcoin adoption when it reaches massive usage? Sorry to say, my mind tells me that even some of the productive activities of the local population dont involve much use of electronic devices such as smartphones.

Talking is easy, doing and developing is difficult, El Salvador has adopted Bitcoin by all means, but it still doesn't suit the will of the government.

If the Central African Republic follows El Salvador's steps and footsteps I think it's good, but CAR must see firsthand the facts of Bitcoin users in CAR,
For example:
• What percentage of people in CAR use Bitcoin and how many active services use the Bitcoin payment feature.
• Central African Republic should really review the people who use Bitcoin and how useful Bitcoin is for the people there, before adopting and payment methods.

I see that there are countries that adopt Bitcoin based on the news, but they don't review Bitcoin users directly, from all sectors, doing a review is better than regretting it later, before making an adoption decision and so on.

I totally get where you're coming from. It's clear that just adopting Bitcoin as legal tender won't magically solve all the economic problems in CAR. Building a strong economy takes a lot more than that, like investing in education, setting up factories, and taking advantage of the local workforce.

That said, cryptocurrencies can still be a useful piece of the puzzle. They can help bring in foreign investments, make international trade easier, and even inspire technological advances. And on top of that bring in more tourists...

For such projects, the country must train specialists. They had to recruit a group of students and send them to study in other countries, so that after a few years they would come back and do their projects on the territory of CAR.
This approach of governance is similar to the fact that the country is run by brainless economists. The economy is not bitcoin, you need to build factories and enterprises, because of the cheap labor force, make competitive products. And from the fact that you allow cryptocurrencies, nothing will change. Maybe life in developed or tourist countries will be a plus.

Are you sure they also had such a plan? AFAIK, only El Salvador is planning to build something like that ^{[I did a quick search on Google, but had no luck in finding any connection to CAR]}.

I'm having mixed feelings about it... It was an awful decision to make it a legal tender when their internet penetration rate was ^{[and still is]} very low, but they could've tried improving the infrastructure to help with the transition ^{[as an outsider, I'm not seeing "any" improvement]}!
^{- I do know CAR is currently suffering from all sorts of angles, but when they overturn such decisions to go with the easy route of not dealing with the issue in question, it clearly shows the ones who are in control are just a bunch of fools!}

You are absolutely right. I think they initially did this as a form of good publicity so the public forgets about their problems.

Adopting Bitcoin is not as easy as some might think. It needs an appropriate economic, legal and infrastructure environment. There are many things that any country needs to succeed in adopting Bitcoin. It is not just a decision that is issued and it is over.

If only 10% of the population has access to the Internet, how can this adoption work? Bitcoin is a virtual currency that works only on the Internet, and without the presence of the Internet and the appropriate infrastructure, this cannot work.

The main problem is that some countries (especially the poor ones) think that adopting Bitcoin is a solution to their economic problems, and this is not true.

What do you think about the CAR dropping Bitcoin as a legal tender?

Hello guys I wrote this article. Read it here for better formatting:
https://www.jbgsmining.com/en/post/central-african-republic-drops-bitcoin-as-legal-tender

In April 2022, the Central African Republic (CAR) introduced Bitcoin as legal tender, aiming to position itself as one of the "bravest and most visionary countries in the world." However, just one year later, the country has reversed its decision and passed a new law restricting the use of cryptocurrencies once again.

The CAR is one of the poorest countries in the world, struggling with numerous challenges such as political instability, crumbling infrastructure, and food shortages. Nevertheless, last year, the country decided to introduce Bitcoin as legal tender, following El Salvador as the second nation to take this bold step. However, the move generated little interest as most business owners preferred to focus on improving infrastructure and security.

From the very beginning, the introduction of Bitcoin as legal tender was met with skepticism, not least because of the CAR's close ties with Russia and suspicions that the use of cryptocurrencies could serve to circumvent sanctions. Additionally, the United Nations warned that cryptocurrencies in developing countries could be associated with high risks and costs.
Now, the Central African Republic has reversed its decision and repealed the original law. Instead, a new law has been enacted, designating Bitcoin and other cryptocurrencies as reference values that citizens can voluntarily use or accept as payment.

The failure of the Bitcoin project in the CAR can be attributed primarily to the country's economic situation and lack of development. From the outset of the Bitcoin introduction, there were strong doubts about the project's success, as only about ten percent of the population had access to the internet. Furthermore, the promised economic benefits never materialized, and planned projects like building a Bitcoin city or launching their own cryptocurrency stalled.