Investing.com – Last week, the Central African Republic’s parliament passed a cryptocurrency law that will allow the currency to be used as legal tender in the future.
Along with El Salvador, it would be the second country in the world to take this step. Opposition parties criticized the government for the decision, as it was taken without consulting the country’s central bank.
However, the government seems ready to use all means to fight against the poverty of the population. The Central African Republic is ranked 188th out of 189 on the UNDP development index and millions of people have no access to the banking system.
It remains to be seen whether the introduction of a cryptocurrency as a legal form of payment will actually improve people’s lives, as only 557,000 have access to the internet, as reported by Bloomberg.
The IMF also sees the government’s initiative as questionable, but pledged its support in the face of related difficulties, as it explained:
“The introduction of bitcoin as legal tender in the Central African Republic raises serious legal, transparency and economic policy concerns.
IMF staff are helping regional authorities and authorities in the Central African Republic to address the issues raised by the new law.”
Bitcoin Technical Analysis
Bitcoin managed to break above the 61.8 percent Fibo retracement of $38,815 based on the day’s closing price. The psychologically important threshold of 40,000 dollars could even be crossed briefly.
All in all, it looks like an extension of the rally towards the 50 percent Fibo retracement of $40.607 is possible.
If the support at the 61.8% Fibo retracement is broken by the bears, losses are possible towards the recent low of $37,397 and the 78.6% Fibo retracement of $36,265.
By Marco Oehrl