2023-05-04 16:03:08
Barely a year after bitcoin was declared legal tender in the Central African Republic, the country is already dancing back.
Central Africa is not Central America
The Central African Republic (CAR) with a population of 5.5 million is considered an insignificant and backward country in world politics, where from time to time civil wars and military coups set back the country’s development. Last year, however, it appeared as significant news in the world press that after Salvador the KAK also declares bitcoin as an official means of payment. The result is a complete failure, contrary to the positive news coming from the Central American country, no progress has been made in Central Africa with the introduction of digital currency.
The Central African Republic is one of the poorest countries in the world, constantly facing many obstacles such as political instability, inadequate infrastructure and food shortages. In the 2018 human development index, the Central African Republic was second to last, approximately 79% of its residents live in poverty. According to other reports, more than three million people in the country are in need of humanitarian assistance, more than 85% of the population does not have electricity in their homes, and only 10% have internet access.
It was a doomed attempt
Among the depressing data, low internet access was clearly the most significant obstacle to the spread of bitcoin and the digital economy. BTC worldwide helps third-world people who do not have the opportunity to connect to the global banking system (in the English jargon it calls them “unbanked”), but digital money alone cannot solve all the country’s underlying infrastructure problems. Bitcoin can be used offline to some extent, but the lack of electricity and internet at this level has become too much of a problem.
In any case, there was great skepticism in the country regarding the adoption of bitcoin as an official currency, partly due to the country’s close ties to Russia, as this raised suspicions that the introduction of cryptocurrencies was actually invented to circumvent sanctions. The UN has also warned that developing countries such as the Central African Republic may face high risks and costs associated with cryptocurrencies. This skepticism was not unfounded, nothing of the ambitious plans, such as the construction of the “Bitcoin city”, was realized.
There are also positive signs in other countries in Africa
Despite the dismal experience, bitcoin and other cryptocurrencies are gaining popularity across Africa. Interest in crypto has grown significantly in Nigeria and South Africa: millions of users in these countries own bitcoins or other cryptocurrencies. The growth of the market is mainly driven by the high inflation of local fiat currencies, the age and technological development of society, as well as the high acceptance rate in the trade and service sector.
All in all, it can be said that there were many signs and rational reasons for the fall of bitcoin in the Central African Republic. Despite the setback, however, other African countries are the world’s most promising, growing epicenters of bitcoin adoption.
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