The Central African Republic is following in the footsteps of El Salvador, which adopted Bitcoin as legal tender last year.
The Central African Republic has adopted Bitcoin as its official currency, the presidency said Wednesday, making it the first country in Africa and only the second in the world to do so.
Despite its rich reserves of gold and diamonds, the Central African Republic is one of the poorest and least developed countries in the world and has been gripped by rebel violence for years.
A law regulating the use of cryptocurrency was passed unanimously by parliament last week, according to a statement signed by Obed Namsio, chief of staff to President Faustin-Archange Touadera.
“The president supports this bill because it will improve the conditions of Central African citizens,” Namsio told Reuters, without elaborating.
In the statement, he called it “a decisive step towards opening new opportunities for our country”.
The Central African Republic is one of six countries that use the Central African CFA franc, a regional currency administered by the Bank of Central African States (BEAC).
Two of the country’s former prime ministers signed a letter last week expressing concerns about Bitcoin’s adoption without guidance from the BEAC, calling it a “serious violation”.
“The BEAC learned at the same time as the public of the enactment of a new cryptocurrency law in the Central African Republic,” a BEAC spokesperson told Reuters news agency, adding that the bank had not yet received an official response.
El Salvador last year became the first country in the world to adopt Bitcoin as legal tender, but the rollout was complicated by skepticism and it postponed a proposed Bitcoin bond in March amid global market turmoil.
African governments have taken a diverse approach to regulating cryptocurrencies and blockchain technology.
Nigeria’s central bank last year banned local banks from working with cryptocurrencies before launching its own digital currency, the eNaira.
South African regulators have been exploring the possible regulation of cryptocurrencies and other blockchain technology, and Tanzania’s central bank said last year it was working on a presidential directive to prepare for cryptocurrencies.