The Central African Republic is now the second country in the world to declare bitcoin an official currency, following El Salvador’s same decision last year.
Why it matters: The more countries that accept bitcoin as legal tender, the more mainstream it will become. Bitcoin could also help individuals in developing nations escape poverty, The Guardian reports.
What they’re saying: Bitcoin is especially appealing to nations unable to control their money supply and obtain international loans backed in their own currencies, according to Bronwyn Ruth Williams, future finance specialist at Flux Trends in Johannesburg.
- The technology involved in using cryptocurrency was also easier — and cheaper — than several mainstream financial options, Williams said, according to Bloomberg, adding that the use of bitcoin could be encouraged though incentives like giving free bitcoins to people who open up government wallets.
- Details: Central African Republic President Faustin-Archange Touadera validated the law Wednesday, recognizing bitcoin as an official currency alongside the West African CFA franc.
- Tax contributions can also be paid in cryptocurrencies through platforms recognized by the government, the government statement said.
- The Central African Republic remains one of the poorest countries in the world. It ranks near the very bottom of the U.N. Human Development Index (188 out of 189 countries in 2020), according to a WorldBank report.
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