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Crypto Exchanges& Regulation in Central African Republic

Top exchanges in Central African Republic by Coincub criteria
Article review author
Jonathan Lea
Central African Republic head image

Crypto Country Rating: 4.5/10

4.5/10
Institutional acceptance
Low institutional acceptance from leading bodies
4/10
Exchanges & Wallets availability
Minimal internet coverage, low VASP availability
6/10
Government regulation
Bitcoin legal currency but no strategy or regulation in place
3.5/10
Defi acceptance
Not significant
5/10
Financial services
Blockchain, Fintech, and VASPs underdeveloped
4/10
Transparency
No AML or regulation in place
4/10
Spending crypto
Pure transactional if spending at all possible.
4/10
Banks activity in crypto
Banks were caught by surprise at the decision.

Introduction

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.

Tax

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. 

Bitcoin mining.

Just why 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.

Blockchain community

We have no information on the establishment of a blockchain community or studies centers in the CAR

Initial Coin Offerings and Start-ups

We have no information on any ICO activity in the CAR.

Helpful?
FAQ

New to crypto? Here’s our guide!

FAQ Image #1 01 Why Bitcoin? It seems like the buzz around Bitcoin just keeps growing. Bitcoin is a constantly evolving technology with a passionate community. What is it about the digital asset that makes it such a controversial topic and attractive investment?
FAQ Image #2 02 How to Get Started with Bitcoin It can be difficult to get past the technical jargon surrounding bitcoin (BTC) and other cryptocurrencies in order to figure out how you can buy and store them. Beginners can purchase Bitcoin, for example, on many exchanges using fiat currency like U.S. Dollar, Euro or British Pound.
FAQ Image #3 03 Blockchains 101 Blockchains are a type of database where data is stored in blocks that are chained together. As new data comes in, it is entered into a block, which is then chained to the previous block. The Bitcoin blockchain serves as a ledger that records every Bitcoin transaction in history.
FAQ Image #4 04 Bitcoin in the Real World Ok - you’ve found an exchange, bought your Bitcoin, and stored it safely. What’s next? By now you can buy just about anything with Bitcoin if you try hard enough, from Amazon gift cards to an old master painting. You can also convert your BTC to fiat with ATMs, an exchange, and more.

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