By adopting bitcoin as its official currency this week, the Central African Republic claims to “enter the map of the most courageous and visionary countries in the world”, according to an official statement from the local presidency. The decision contrasts with the reality of the country where 96% of the population does not have access to the internet, according to the World Bank, and which ranks among the worst positions in the economic and social rankings.
The country in the heart of the African continent is the second to make bitcoin official as a currency. The first was El Salvador in September 2021.
The UN (United Nations) ranks the Central African Republic as the second worst HDI (Human Development Index) among 189 countries, behind only Niger. According to the World Bank, the GDP (Gross Domestic Product) per capita of the Central African Republic (US$492.80) is the sixth worst – equivalent to 7% of the Brazilian GDP per capita (US$6,796.84). .
With the measure unanimously approved by the National Assembly, bitcoin becomes official alongside the central RCA franc (XAF) – currency adopted in five other countries in the region.
The Central African Republic gained political independence from France in 1960, but it still suffers from centuries of exploitation. Despite being in a region rich in natural resources such as oil, uranium, diamonds and fertile land, it has an almost insignificant share in the global economy.
As if the economic and social problems were not enough, the country has a history of political instability, corruption and internal armed conflicts.
The UN has maintained the MINUSCA (United Nations Integrated Multidimensional Mission for the Stabilization of the Central African Republic) since 2014. It is one of the longest peace operations, which included the deployment of Brazilian troops.
According to the UNHCR (United Nations High Commissioner for Refugees), there are currently around 650,000 internally displaced people and more than 730,000 refugees in neighboring countries.
A peace agreement has been in place since 2019 that seeks to maintain stability between the government and 14 recognized rebel groups. The militias control different parts of the 623,000 km² country (slightly larger than the state of Minas Gerais) and are usually linked to religious groups. It is estimated that 80% of the population is Christian and 15% Muslim.
The relative success of the peace agreement is what secured President Faustin-Archange Touadera’s re-election in January 2021 for another five years in office.
According to Ana Flávia Watanabe, a master in international relations who did her dissertation on the Central African Republic, official state control is limited to the region of the capital, Bangui. The other regions are taken over by paramilitary groups, which control the roads and the exploitation of natural resources.
Violence and lack of infrastructure are so pronounced that they make the country almost inaccessible to tourism. Brazil has no consular or diplomatic representation there. France advises against traveling to the Central African Republic and recommends that its citizens circulate only in the central area of ​​Bangui, obeying the curfew that runs from midnight to 5 am.
Watanabe says that conflicts in the region are maintained through funding from other countries interested in local wealth, especially diamonds and cattle.
“It’s a population that doesn’t have much knowledge, because it lacks access to basic services. Most regions don’t have schools or hospitals. I don’t know how they intend to use this currency [bitcoin] internally”, says Watanabe.
Daniel Kosinski, a doctor in international political economy from UFRJ (Federal University of Rio de Janeiro) and a specialist in crypto assets, says that the measure is more of a marketing move than an economic one. The novelty takes the country to economic notebooks, not pages about armed conflicts.
Kosinski compares the situation to El Savador, which has also officially adopted bitcoin, but continues to use the US dollar as its currency in practice.
“It is more a testament to the fragility of these countries than a sign of a new path. Bitcoin will also be an instrument that they do not control, because they are countries with no expectations of becoming de facto sovereigns”, he says.
In the expert’s opinion, countries with strong economies tend to have their own cryptocurrencies rather than adopting bitcoin. This is what China does with its Chinese digital currency, which also inspires tests in Brazil.
Kosinski says that, in El Salvador, bitcoin has not effectively become a currency, but gradually assumes the role of a means of payment to move dollar values. He believes that this could happen in the Central African Republic, but in an even more limited way, considering that the population’s access to electronic equipment and quality internet is very restricted.
“Bitcoin has the purpose of providing financial services, bypassing the difficulties of a traditional banking system. This is part of the narrative, which has a basis of truth, but is simplistic. This is because the technology can dispense with a bank branch, but still needs a telephone cell phone, internet, minimum educational level and sign up for a crypto exchange. So it’s not a simple thing,” says Kosinski.
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