The parliament of the Central African Republic (CAR) has passed a bill, despite opposition that legalizes the regulation and use of digital assets. According to the report, the proposed cryptocurrency law will enable users to use crypto as legal tender and also pay taxes.
Being the first in Africa to accept crypto, the country is said to follow in the footsteps of El Salvador which is the first to legalize the use of Bitcoin as legal tender in the world.
Justin Gourna Zacko, the Minister of Digital Economy, Postal and Telecommunications is the one advocating for the approval of the bill.
While faced with lots of opposition in the parliament, several reasons account for the adoption of crypto by the country, one of which is that CAR has been having difficulties with transacting business in foreign currencies, owing to how bad the currency of the nation has lost its value. As of the time of writing this report, one Euro equals 651 FCFA.
Cryptocurrency however will provide the opportunity where the citizens of CAR will transact in businesses across borders using digital assets, without being concerned about the depleting nature of their currency.
Beyond providing a suitable legal framework for crypto adoption in the country, the finance minister also wants to ensure that a favorable environment is assured for the financial sector, where taxes can be paid in virtual assets forms.
According to a report, violators of the requirements of this law could face a 20-year prison sentence as well as a fine amounting to about 100 million CFA Francs.
The adoption of virtual assets as legal tender in Africa has mostly met a hard rock, governments have had a hard time regulating the digital assets class, owing to its decentralized nature.
In February 2021, cryptocurrency trade was banned in Nigeria. Before then, the country was second in the world, after the US in P2P trading volumes in crypto. Despite various attempts at cracking down on the adoption of digital assets by some nations of the world, cryptocurrency continues to gain popularity and acceptance.