The Central Africa Republic (CAR)’s surprise bitcoin adoption decision once again shows that the top cryptocurrency can be an alternative to fiat currency. But, it still needs to spend heavily on its telecommunications infrastructure. Education is also a priority for the CAR, which should help educate its population about cryptocurrency basics.
The CAR’s Expensive Internet
There is little doubt Central Africa Republic’s decision to designate bitcoin (BTC) as legal tender has surprised many. Few people expected CAR — one of Africa’s most impoverished countries and one whose economy has been ravaged by a civil war — to be the first to adopt bitcoin.
For critics still trying to understand why another nation has joined El Salvador in making bitcoin legal tender, the CAR’s move is perplexing. To begin with, they cannot understand how a country with such a low internet penetration rate — less than 12% — has chosen the top cryptocurrency as its transacting currency.
The Central Africa Republic’s reported infrastructure deficit and the fact that mobile connections are only available to 30% of the population seemingly renders the case for adopting bitcoin less convincing. Also, according to a 2018 ICT Profile of the CAR, the country’s then “uncertain institutional situation” was said to be constraining investment in broadband networks and access to cross-border submarine cables.
This and other factors have meant that the Central Africa Republic has been forced to use expensive satellite connections to access most of its internet traffic. This has resulted in high internet prices. Adoption efforts are hampered by the high cost of internet.
Despite these seemingly insurmountable challenges, proponents of bitcoin and supporters of an alternative financial system are adamant the Central Africa Republic’s decision proves digital currencies have a role to play. This holds true especially for those countries who are disconnected from the global finance system.
You can still legally tender private money
For followers of Friedrich Hayek, a famous Austrian economist and proponent of private money, the adoption of bitcoin by El Salvador and now the Central Africa Republic proves he was right — there is indeed a place for private money.
Although the International Monetary Fund is strongly opposed to bitcoin, some people believe there will be more countries that make it legal tender. In fact, reports that some 44 countries were represented at El Salvador’s recent bitcoin exhibition suggest more countries might follow in the footsteps of these two countries.
It is reasonable to expect that the CAR intends to invest heavily to develop the telecommunication infrastructure. However, increasing the amount of money earmarked to this purpose is not a guarantee of a change in attitudes towards Bitcoin.
The CAR must therefore ensure it has funds reserved for efforts that are aimed at boosting the population’s understanding of bitcoin and how to buy bitcoin for the first time. In fact, education remains a key factor in eradicating ignorance. This is true not only for the Central Africa Republic, but also across most of the developing world.
The Basics
A majority of the CAR’s more than 5 million inhabitants must become acquainted with the basics such as a bitcoin wallet, recovery phrases or a wallet’s public address. This will increase the chance of CAR becoming a country that accepts bitcoin as legal tender.
The CAR must educate its citizens and work closely with crypto players such as wallet providers, payment processors, cryptocurrency exchanges, and payment processors. The African nation must partner with a respected player in this industry, just like El Salvador was the first country that adopted bitcoin.
If the Central Africa Republic decides to follow the recommendations suggested in this article, it could well achieve its goal of seeing bitcoin become the country’s reference currency much sooner. This is the same for every country who wants bitcoin to be legal tender.
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