Bitcoin is unlikely to solve Central African Republic’s problems and will be out of reach for many…

Bitcoin is unlikely to solve Central African Republic’s problems and will be out of reach for many of its citizens. Nonetheless, a move motivated by geopolitics makes the country a testing ground for the future.

The adoption of Bitcoin as an official currency by Central African Republic (CAR) has been greeted with scepticism as to its economic merits and suspicion over the government’s motives, but also with some excitement at the establishment of a new frontier.

The announcement at the end of April made CAR the second country in the world to accept Bitcoin as an official currency, after El Salvador in September 2021.

CAR’s primary currency remains the Central African CFA Franc, which it shares with Cameroon, Chad, Equatorial Guinea, Gabon and Republic of the Congo, and is generally regarded as stable because it is pegged to the Euro.

Adopting Bitcoin is “eye catching, though economically questionable”, according to Weyinmi Popo, a corporate finance partner with Akin Gump Strauss Hauer & Feld in London, noting that the statements from CAR’s government focused more on being the first African country to adopt the cryptocurrency, rather than any economic merits.

Attracting investment “has clearly been a challenge for a landlocked country that has been wracked by civil war”, Popo continues, “however, it is unclear how adopting Bitcoin would help with attracting investment”. Despite the publicity, “it is unlikely in and of itself to make the…