Is cryptocurrency regulated? Yes, in some places. There’s a lot of debate surrounding cryptocurrency regulation around the world and it is largely about whether to embrace cryptocurrency or attack it. The skyrocketing value of crypto is now worth trillions of dollars. It is a key driver for legislative pushes to regulate cryptocurrency. And the growing […]
UK’s crypto ambitions Recent reports of the death of crypto appear to be greatly exaggerated, especially in the UK where, despite dire warnings of a crypto meltdown, the banning of Bitcoin ATMs, and the Bank of England’s indifference to CBDC, the Government now wants to power ahead and develop the UK as a leading crypto-financial community. […]
Which continents lead the way in crypto adoptions, and which are falling behind? Do continents display individual traits and characteristics? And is China pulling down Asia in the crypto race? North America is the world’s top crypto continent North America takes the top spot as the leading crypto continent in the latest 2022 Coincub world crypto […]
The big news was, of course, that the Central African Republic CAR had designated Bitcoin as legal tender, putting the country on equal billing with good old El Salvador as a Bitcoin adopter. It’s also a move taken by, surprisingly, Lugano, a Canton of Switzerland, so it’s not just impoverished (sorry, developing) countries that see something in the decision to adopt Bitcoin as legal tender. That said, as of April 2022 April, Bitcoin can be accepted as payment alongside the CFA franc, underlining the country’s credentials as a visionary country according to the government.
The decision to adopt this most technological of currencies could, and probably will, be severely hamstrung by the country’s undeveloped internet infrastructure, with reportedly only some 10% of the population having access to it. Plenty of other African nations have taken to digital payment systems to store and transfer local currency utilizing standard existing infrastructure, but crypto transactions among the wider population of CAR may take time to take off.
There is insufficient reliable information on the question of taxation of Bitcoin in the CAR, but presumably, like El Salvador, citizens that pay tax in the CAR can do it with Bitcoin. At this point, we assume any individual or company crypto that generates gains from crypto trading and investment will be taxed in accordance with the Republic’s standard income tax reporting requirements.
Just as the CAR has followed El Salvador (and Lugano) in adopting Bitcoin as legal tender, seems to be a triumph of wishful thinking in a country with little widespread internet access. Moreover, the country is no electric energy powerhouse, unlike El Salvador or Iceland, for example, which have the natural resources to generate the electricity required for large-scale mining. In this regard mining in the CAR is unlikely to, er, generate much activity – at least legitimate mining activity.
Transparency and security
The CAR has plenty of troubles – to say the very least – including ongoing civil strife, poverty, crime, and a possible ambivalence towards the US Dollar (see below). Its CFA franc, the official currency before Bitcoin, is backed by France and pegged to the euro along with the likes of Cameroon, Chad, and the Republic of Congo. These other Euro-linked countries, however, have decidedly not adopted Bitcoin and the presiding body in matters of financial legitimacy, the Central African Financial Market Surveillance, was caught unawares by the CAR’s decision, meaning that adequate security, consumer protection, and AML laws have yet to be seriously discussed and enforced. With so many uncertainties, including the CAR’s long-standing involvement with Russia which opens the suspicion of sanctions-busting objectives, means that much remains to be seen as to the outcome – with transparency being a long way down the list.
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