The Central African Republic becomes the Second Country to adopt Bitcoin as Legal Tender

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The Central African Republic becomes the Second Country to adopt Bitcoin as Legal Tender
30 Apr 2022
6 min read

News Synopsis

The Central African Republic (CAR) becomes the second country in the world to approve the legal status of Bitcoin after El Salvador approved it earlier. The proposed bill was signed into law after getting a unanimous go-ahead from its  National Assembly. Similar to the economy of El Salvador, which depends on the US dollar, the Central African Republic’s regional currency is backed by the French. This simply means that CAR does not have any monetary policy of its own, and eventually, has no control over the supply of money within its borders. Currently, the Central African CFA franc (XAF) has an average annual inflation rate of 4.8%.

However, in the last five years, the inflation rate has fluctuated in a range of -3% to 12%. Previously, Fidelity, a crypto investment firm estimated that more governments and even a central bank could buy the famous cryptocurrency Bitcoin in the year 2022. According to the report by Fidelity, if enough countries jump on the bandwagon, others would likely follow this even if only to protect themselves from being at a competitive disadvantage. In India, Nirmala Sitharaman, Union Finance Minister has time and again told that India will not be looking at Bitcoin, or any other crypto asset, as a ‘currency’.

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