African Reserves

Central African Republic greenlights Bitcoin as a reserve asset

Summary:

  • Bitcoin is expected to serve as a reserve asset in the Central African Republic.
  • The primary coin was recently approved as a legal tender in the African state following a proposal by leading lawmakers.
  • CAR has also launched its Sango coin and sidechain project to complement and fuel nationwide crypto adoption.
  • Initiatives such as the tokenization of natural resources also accompanied the launch of Sango.
  • Bitcoin adoption in the CAR has been met with strong opposition from entities such as the IMF and the Bank of Central African States.

The Central African Republic (CAR) has planned to leverage Bitcoin as a reserve asset as part of the country’s efforts to embrace cryptocurrencies and blockchain technology as tools to bolster the weakened economy.

At press time, Bitcoin is trading above $21,000 per trade view data.

Bitcoin (BTC) daily chart (Source: TradingView)

CAR’s move to deploy the top crypto coin as part of its national reserves follows a policy to legalize BTC in the country. The nation became the first jurisdiction in Africa to approve Bitcoin as legal tender in April.

The national assembly gave its approval after two lawmakers, digital economy minister Gourna Zacko and finance minister Calixte Nganongo crafted the proposal. Officials expressed support for the policy, and the bill passed unanimously in the Senate.

CAR followed up its BTC legalization bill with a project dubbed Sango, a blockchain-based platform to support crypto adoption in the country. According to reports, Sango is a Bitcoin sidechain built similarly to the Liquid Network.

Sango is scheduled to launch on July 25 and is expected to work as a digital currency system with a layer 2 component.

Bitcoin adoption in CAR has faced opposition from financial regulators

While the passage of BTC in the Senate of the Central African Republic has received support, the move has drawn criticism from outside bodies who believe the move could jeopardize the economic stability of the country rather than save it.

Just as in the case of El Salvador, the International Monetary Fund raised its concerns and advised the CAR to consider taking a different route. The Bank of Central African States, a financial powerhouse that serves six countries including the CAR, also opposed the nationwide adoption of BTC.