The Central African Republic (CAR) has become the world’s second country to approve bitcoin as legal tender.
It joins central American nation El Salvador as the only other nation to adopt bitcoin as an official currency, reported the BBC. That move in September 2021 was criticised by many economists who said it would increase the risk of financial instability because of cryptocurrencies’ notorious volatility.
The conflict-plagued African country boasts rich reserves of diamonds, gold and uranium but remains one of the globe’s most impoverished nations.
It currently uses the French-backed CFA franc as its currency and, according to the BBC report, some see the move by the minerals-rich nation as an attempt to undermine the CFA and as evidence of a bigger geopolitical conflict between Russia and France for control for the region.
The move came with bitcoin struggling to get past the $40,000 mark on Thursday and as Brazil’s Senate, approved a bill on cryptocurrencies during a plenary session this week, paving the way for official regulation of crypto in the world’s ninth-largest economy.
The bill needs approval from the country’s Chamber of Deputies though before it can be signed into law by the president.