As of spring 2022, two of the poorest nations on Earth have adopted Bitcoin — the leading crypto-currency with the highest global market capitalization — as legal tender, with the Central African Republic’s parliament having voted on such a measure on April 21, 2022, which had been introduced by the poverty-stricken country’s Minister of Digital Economy, Post and Telecommunications, Justin Gourna Zacko.
This development, while perhaps surprising, is not entirely shocking. El Salvador, an analogously impoverished Latin-American nation facing rather similar problems of public corruption and civil unrest as CAR, has likewise embraced the purported promises of ‘crypto’ and adopted BTC as legal tender last year, in September 2021. Since then, reports as to the initiative’s success tend to be on the scathing side, with one noting that, after half a year post-adoption, “86% of the businesses contacted said they had never conducted a transaction using Bitcoin” and other “businesses around Bitcoin Beach said they’d given up on Bitcoin and reverted to accepting only cash.”
While the wisdom in this development may be up for debate (for instance, one needs electronics & access to the internet to utilize bitcoin for transactions — not to speak of actually mining the crypto-currency, requiring vast amounts of energy and cooling capacity — which is something that less than 10% of CAR citizens have access to on a regular basis: the African Development Bank estimates that only 557,000 of CAR’s 4.8 million people have access to the internet). The World Bank reports that the country’s “electrical infrastructure is extremely limited” and thus, AAF predicts, the Bitcoin adoption is more show than go. The sole reason for this adoption (other than the underhanded promotion of corrupt activities by easing international money transfers through the blockchain technology underlying BTC, see below) that we at AAF can perceive would be to allow for a safe haven against (hyper-)inflation of the FCFA currency, which has seen extreme inflationary spikes over the past decade, during which those with means and access have allegedly turned to crypto-currencies, and of course other hard currencies, as an alternative means to protect the value of their savings.
However, it will open up an important avenue for future corruption at the highest levels of government — namely, where officials have access to computers, the internet, and now may legally (!) use BTC to undertake official transactions, potentially eviscerating any of the ever so slight levels of accountability the CAR government had to-date as to the whereabouts of the limited state coffer’s contents… While crypo-evangelists commonly advocate in favor of blockchain technology as a means to counter-act corruption — due to the technical ‘distributed ledger’ technology underlying it, allowing for theoretical traceability of transactions across the time line — this has proven not to be the case to-date, and crypto remains a high-value currency of choice for use on the Dark Web and by oligarchs and corrupt officials across the globe.