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Central African Republic Bitcoin Adoption Shocks Crypto World

Navigasi - Central African Republic Bitcoin adoption, quite surprising and confusing the crypto world. This is because many countries with the world's largest economies are still wary of the risks from these digital assets.

Central African Republic Bitcoin Adoption Shocks Crypto World
Central African Republic Bitcoin Adoption Shocks Crypto World

The inauguration of the Central African Republic using Bitcoin as a means of payment is also quite confusing to the cryptocurrency world and prompts caution from the IMF, which has been making announcements about the risks of adopting Bitcoin as a means of payment.

Bitcoin, is one of the digital currencies that exist in a ledger technology called blockchain. That way, Bitcoin transactions to buy and sell goods or services depend on a reliable, fast internet and wide access to a computer or smartphone.

On the other hand, according to the website DataReportal estimates the Central African Republic only has an internet penetration rate of 11 percent, the same as about 550,000 people online last year.

Meanwhile only about 14 percent of people have access to electricity and less than half have a cell phone connection, said the Economist Intelligence Unit.

Four crypto analysts and experts say huge challenges lie ahead in adopting Bitcoin in one of the world's poorest countries with low internet usage, widespread conflict, unstable electricity and a population largely unfamiliar with crypto.

The Central African Republic provided few details in its statement on how it plans to address these challenges.

A government statement said the move made the Central African Republic one of the "most visionary countries" in the world, but most residents there who are already familiar with mobile money to buy goods and pay bills are still confused about crypto.

"Bitcoin. What is it? What can Bitcoin bring to our country?" said Auguste Agou, who runs a local timber company in Bangui (capital of the Central African Republic), quoted from Channel News Asia, Wednesday (4/5/2022).

This African nation of 4.8 million people is the second country in the world to switch to Bitcoin, after El Salvador.

Analyst at the Economist Intelligence Unit, Nathan Hayes said there are major barriers to the adoption of crypto as a means of payment.

"Given the huge barriers to adoption and the risks associated with use, and the seemingly limited benefits, we don't expect widespread adoption of cryptocurrencies in the country," Hayes said.

Meanwhile, blockchain research firm Chainalysis, which is in charge of tracking crypto usage, also said it had no data on the Central African Republic.