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The Central African Republic decided in April to open up to cryptocurrency. Bitcoin thus became the official currency, alongside the CFA franc. Only El Salvador had done the same before. A development praised by the authorities but which worries the BEAC, the Bank of Central African States. A delegation of specialists in this cryptocurrency recently traveled to Bangui where it was received by President Touadéra. What do you think of such a change? Isn’t this bet risky at a time when bitcoin is losing its value? Daniel Ouedraogo, Senior Economist at the Afro Foundation, is our guest.
RFI: Do you understand the strategy of the Central African Republic to make bitcoin its official currency? ?
Daniel Ouedraogo : This decision is of course eminently political. But from an economic point of view, the Central African Republic is a country with extremely high banking and financial inclusion challenges because it is a country where the rate of access to bank accounts is lower than 5%. Very few people have access to liquidity and there is very little banking infrastructure. And also given the weak development of mobile telephony in the country, the use of bitcoin may seem like a solution, I would say, relatively easy for the authorities in place.
What benefits can the country derive from this currency ?
I will says that, absolutely, the use of a cryptocurrency makes it possible to remove the brakes linked to the weakness of banking infrastructures. It will improve economic exchanges in a country where there are not enough banks, very few people have bank accounts. So that will solve this problem. And, at the international level, I imagine that the choice of bitcoin is also linked to this because it allows them to develop their trade internationally, also taking into account the current international context. But, obviously, the choice of bitcoin in particular, given the intrinsic characteristics of this cryptocurrency, it also exposes the country to enormous risks. Even though the country has adopted a legal framework for the use of cryptocurrency, there is not enough protection for consumers and I do not believe that the country alone can guarantee this type of protection at scale. national.
You talk about risk, it is true that this bet by the Central African authorities may seem risky because bitcoin has lost half of its value over the past six months.
Exactly. A much more structured, more cautious approach would perhaps have led the Central African Republic to first adapt a reasoning or, in any case, a more, I would say, regional approach. Because the Central African Republic is in the CEMAC zone, in a monetary union therefore, that means that it shares values of economic or monetary integration at the regional level. So already, we can wonder about the interest of a solitary approach like this. And, the second most important question is obviously the choice of bitcoin which is an extremely volatile cryptocurrency, the Central African Republic not having sufficient guarantees to protect bitcoin users against this high volatility that this cryptocurrency can have. This therefore exposes the country’s potential users to significant losses of money, purchasing power, which could be an aggravating factor for the various crises that the country is already experiencing.
By going through bitcoin, the Central African Republic will spiral out of control. The Central African opposition fears an increase in money laundering and tax evasion. You share these fears ?
Insofar as the security context is not stable in the Central African Republic, the use of bitcoin opens the way to money laundering, that is quite possible in a context of insecurity. Now it is up to the authorities to provide the guarantees. At an individual level, it seems very difficult to be able to provide this type of guarantee with bitcoin, given the absence of a framework, of legislation, at the international level.
A large part of the Central African population does not have access to the internet. Isn’t this a brake on the development of bitcoin and its use by the population ?
It is true that the level of the Internet is not necessarily very developed. But today, with some mobile applications more or less adapted to the connection in Africa, we can manage to use bitcoin. But it also leads me to say that other technologies exist, technologies designed for Africa, including taking into account the connection challenges that are much more suitable than bitcoin. The blockchain technology of these cryptocurrencies is much more suitable than that of bitcoin for Africa.