The Central African Republic has established legislation that recognizes cryptocurrencies as legal tender and a means of trade. The office of President Faustin Archange Touadera made the announcement on Wednesday. While this isn’t the first country to make such a decision, El Salvador, which was the first to do so, is still grappling with it.
Is legalizing cryptocurrencies a risk or a means to economic stability?
Is the Central African Republic (CAR) taking a chance, or are there safeguards in place to keep the economy afloat? A country’s economy cannot rely only on bitcoin as legal cash due to its volatility. The President of the Central African Republic stated that this move makes his country one of the world’s most daring countries, not only in Africa. Is boldness, though, all that is required?
To boost their economy and keep track of transactions conducted within their borders, many governments have imposed bans or limitations on cryptocurrency. Cryptocurrency is the currency of the future at the present; it is the pinnacle of digitization. However, it looks to be too volatile at the time to be used to support a country’s economy.
Furthermore, because of its decentralized nature, government authorities are on high alert since it poses a threat to economic security.
The IMF, for example, has opposed the use of Bitcoin as legal cash, although more than a handful of CAR legislators voted in favor of the bill. Additionally, the president’s office stated that this was a major step toward opening up new potential for the country by ensuring that bitcoin will be accepted as legal cash alongside the regional CFA franc.