Despite the rapid acceptance of Bitcoin by local and federal governments, experts still say that cryptocurrencies do not fit to be legal tenders.
The Central African Republic has become the first African country to make Bitcoin a legal tender. The Ministry of Finance and Budget and the Ministry of Digital Economy, Postal Services, and Telecommunications have submitted a joint document that recognizes BTC as an acceptable currency in the Central African Republic. Additionally, the document detailed the legal framework for crypto adoption in the country. Support also came from Opposition parties in the country who believe that the country can benefit from digital assets. The National Assembly believes that the new Bitcoin law will help the Central African Republic’s economic recovery.
The Central African Republic to Make Bitcoin Legal Tender
The decision of the Central African Republic came as the Bitcoin fever is widely spreading globally. In September 2021, El Salvador became the first country in the world to announce Bitcoin as a legal tender. El Salvador president Nayib Bukele said in November that the country is planning to develop a “Bitcoin City.” According to the pro-Bitcoin president, sales of Bitcoin bonds with a 6.5% coupon rate within the first five years will fund the development of Bitcoin City. Since the Bitcoin adoption, Bukele has been vocal about his support and bullish stance on BTC.
As the adoption of Bitcoin continues to grow, a special economic zone of Prospera has also recognized BTC as an acceptable currency. Following the announcement, Municipalities in Honduras are now allowed to issue bonds in BTC to attract foreign investments.
The move to make Bitcoin a legal tender in the Central African Republic came from the National Assembly, which unanimously passed the bill. The Minister of Finance and Budget Calixte Nganongo, and the Minister of Digital Economy Gourna Zacko initiated and introduced the Bitcoin legislation. The Ministers submitted the legislation governing Bitcoin and crypto regulation in the Central African Republic.
Experts Say Bitcoin Is Too Volatile to Function as Legal Currency
Despite the rapid acceptance of Bitcoin by local and federal governments, experts still opine that cryptocurrencies do not fit to be legal tenders. Experts believe that crypto assets are too volatile to function as legal currencies in modern markets. Regardless, many top institutional investors like Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) have syndicated interests in Bitcoin. Retail giants like Walmart (NYSE: WMT) and Starbucks (NASDAQ: SBUS) have started accepting Bitcoin payments.
There is a high possibility that these countries will adopt Bitcoin legally before the year runs out. El Salvador and the Central African Republic are now examples that others will observe to determine their Bitcoin stance. Even without officially accepting Bitcoin, a lot of countries allow the everyday use of crypto. Columbia, for instance, has many crypto ATMs in different locations.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
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