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As part of an effort to ameliorate a weakening economy, the Central African Republic (CAR) has planned to leverage Bitcoin as a reserve asset.
CAR Adds Bitcoin to National Reserve Asset
According to data from TradingView, at press time, Bitcoin is trading above 21,000 USD.
The decision to include Bitcoin as a reserve asset under the national treasury of the CAR is based on the policy towards legalizing Bitcoin in the country. Since April this year, CAR is also the first country in Africa as a jurisdiction to accept Bitcoin as fiat currency.
The proposal was approved by parliament after two lawmakers, including Digital Economy Minister Gourna Zacko and Finance Minister Calixte Nganongo, submitted it. The bill received high consensus in the Senate and support from state officials.
It is known that the Central African Republic has followed the bill to legalize BTC through a project called Sango. It is a platform based on blockchain technology and supports the nationwide adoption of cryptocurrency. The report said Sango is a Bitcoin sidechain built like the Liquid Network.
Sango is scheduled to debut on July 25 and will act as a Layer 2 digital currency system.
Objections from foreign financial regulators
Although the Senate has accepted Bitcoin, the move has drawn criticism from financial regulators in the region. They argue that the decision is potentially dangerous, aggravating Central Africa’s unstable economy rather than “rescuing it”.
The lesson mentioned is El Salvador, as the country quickly introduced Bitcoin into the economy, and amid the current market downturn, the country is facing the risk of “defaulting”. The International Monetary Fund reminded CAR to consider alternative solutions.
In addition, the Central African Bank, a financial institution serving six African countries including CAR, is also opposed to accepting BTC on a national scale.
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