In the Central African Republic, the second least developed country in the world according to the UN, under humanitarian assistance and in civil war for nine years, where one inhabitant in 10 has electricity and the Internet, the adoption of bitcoin as legal tender seems to the least absurd.
So much so that the only state, with El Salvador, to have done so was immediately suspected of wanting to favor dubious transactions, at a time when the regime was under the wrath of the UN, Western capitals – including Paris – and international NGOs, who accuse him of having delivered the Central African Republic to Russia and the “mercenaries” of the sulphurous Wagner, accused of “looting” its resources in exchange for military support against the rebels.
Moscow has been under international economic sanctions since invading Ukraine and Bangui has constantly complained about a UN arms embargo since 2013.
On April 28, President Faustin Archange Touadéra announces, to everyone’s surprise, that the Parliament of this very poor country in Central Africa has passed a law which “governs all transactions” in cryptocurrencies and makes bitcoin a “reference currency”. “alongside the CFA franc.
All payments in digital currency, up to taxes, are allowed.
Its practical application seems very hypothetical in a country of 5.5 million inhabitants of which only 15% have access to electricity – even in the capital Bangui, long cuts are daily – and 10% to the Internet, according to the World Bank.
-“What is this ?”-
In front of one of the few ATMs in the city, powered by a generator, the legalization of bitcoin is puzzling.
“What is it?” asks Sylvain, in his thirties, in the queue. “I don’t know what cryptocurrencies are, I don’t even have internet”, laughs Joëlle further in front of her small vegetable stall.
“We are going to educate the population and soon switch to fiber optics and a weak internet connection is enough to buy cryptocurrency,” government spokesman Serge Ghislain Djorie told AFP.
Even among the few businessmen likely to have the means, the knowledge and the technology to use it, the law leaves you speechless.
“I have no interest in having bitcoins here, we have no infrastructure, no knowledge to embark on this adventure, there is no cybercrime unit to guarantee security”, explains on the telephone a entrepreneur from Bangui who wishes to remain anonymous, adding: “there are other priorities such as security, energy, access to water, internet, building roads…”
“If bitcoin can facilitate certain transactions, it is a strange choice as a regular means of payment” in such a country, is surprised Ousmène Jacques Mandeng, professor at the London School of Economics and Political Science.
States that adopt another currency generally choose a more stable currency than their own (US dollar, euro), the price of bitcoin being extremely fluctuating.
– Volatility –
“Bitcoin’s excessive volatility translates into fluctuations in household savings, consumption and wealth” if the cryptocurrency is adopted, warns Ganesh Viswanath-Nastraj, a professor at Warwick Business School.
“There is currently a process for a concerted framework between the six countries of the Economic Community of Central African States (CEMAC), the anti-money laundering authorities and the regulators to legislate on cryptocurrencies”, but “we do not “We were not notified by Bangui of its decision”, underlines Didier Loukakou, director of regulation at the Financial Market Surveillance Commission of Central Africa (Cosumaf).
Bangui has therefore surprised everyone by the incongruity of legislation allowing the use of digital currency in a state at war and almost bankrupt, which cannot feed its population without international humanitarian aid, nor pay the full of its civil servants without that of foreign donors. And whose Minister of the Economy has just judged “alarming” the state of public finances.
“The context, with systemic corruption and a Russian partner under international sanctions, incites suspicion”, analyzes for AFP Thierry Vircoulon, specialist in Central Africa at the French Institute of International Relations (IFRI), adding: “Russia’s search for ways to circumvent international financial sanctions calls for caution”.
“President Touadéra has made the Central African Republic a haven for transnational organized crime” and “individuals are involved in money laundering and trafficking in natural resources, drugs, arms…”, already wrote in October 2020 the American NGO The Sentry, which specializes in tracking down “dirty war money”, invoking in particular “Wagner and other Russian networks”.
However, the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, recently claimed that there is “no strong evidence that digital money can be used to circumvent” international sanctions in general.