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Now, the Central African Republic has reversed its decision and repealed the original law.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.
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