The nation is the second to make bitcoin a form of legal payment.
The Central African Republic has adopted bitcoin as legal tender, making it the second nation in the world -- after El Salvador -- to do so. On Wednesday, President Faustin Archange Touadera's office released a statement announcing that the measure is now law.
According to the bill, the use of bitcoin and other cryptocurrencies in transactions is a legal form of payment along with the CFA franc. Touadera's chief of staff, Obed Namsio, noted that the Central African Republic is the first country on the continent to adopt bitcoin as legal currency. "This move places the Central African Republic on the map of the world's boldest and most visionary countries," he said, according to a report from the Agence France-Presse.
Legislators approved the bill that allows for cryptocurrencies to be used in online trade and electronic transactions. Additionally, exchanges will not be subject to taxes.
A developing country, Central African Republic has a population of approximately 5 million. Though it's rich in mineral deposits and other natural resources, it has faced economic and humanitarian challenges for decades. This move into cryptocurrency is one of the nation's latest efforts to improve CAR's financial infrastructure.
However, the new bill has its detractors. Former prime minister Martin Ziguele, who is now a member of the opposition, raised concerns that the law was passed "by proclamation," and some legislators plan to fight it in Constitutional Court. He argues that the law works to undermine the CFA franc, the country's currency. "It [the law] isn't a priority for the country," he said, per the AFP. "This move raises the question: who benefits from it?"
When El Salvador's government made bitcoin legal tender in September, the IMF raised concerns about cryptocurrency volatility and regulatory measures. The country rejected the agency's recommendations and purchased $21 million worth of bitcoin as the law went into effect.
As digital currency expands its global reach, there are discussions about how to keep these assets safe and issues about storage, taxes and regulations. According to a report from the Brookings Institute, among African countries, Nigeria, Kenya and South Africa have growing cryptocurrency markets, and Central African Republic is joining the race.