The people of the Central African Republic (CAR) are on a mission to be the first country in Africa to enable widespread adoption of bitcoin. They are the second country in the world (after El Salvador) to officially use bitcoin as legal tender for use in regular commerce and for paying taxes.
In April 2022, President Faustin-Archange Touadéra signed a law (which was passed unanimously) making bitcoin and the CFA franc the legal currency of the Central African Republic.
Understanding the challenge ahead
President Touadéra invited a group of Bitcoiners with expertise in various fields to the nation’s capital, Bangui, to advise the country on issues such as setting up internet access, connecting to the Lightning Network and developing mining facilities.
Seven Bitcoin experts spent a week in the country, “to better understand the context of the Central African Republic and identify key factors that will encourage or inhibit Bitcoin adoption in the country,” according to their report. report†
“We arrived with the intention of examining the country’s strengths and weaknesses without prejudice and proposing solutions adapted to the realities on the ground.” —Sebastien Gouspillou
In their recommendations, the group addressed what they saw as the challenges of CAR:
- Low access to electricity
- Little access to the internet
- Low rates from mobile phone users
- Lack of Educational Organizations Dedicated to Bitcoin
- ID card needed to buy a SIM card
The areas where CAR has strengths for successfully adopting bitcoin include:
- Favorable regulation
- Use of mobile money
- Only 5% of the population has a bank
Access to electricity
The report highlights that there are two distinct energy networks in CAR. Electricity access is better in Bangui city. This is less the case in remote, rural areas.
“The energy gap between Bangui and villages requires special attention to avoid an economic gap between cities and isolated areas.”
Despite there being a lot of potential hydropower, many projects have yet to be realized due to a lack of funding.
Access to the Internet
In contrast to El Salvador, where Internet access is widespread, Internet access in the Central African Republic estimated represent only 11.4% of the population in January 2021.
Currently, the Bank of Development of Africa is working with CAR to get fiber internet coverage in 70% of its territory, which covers 90% of the population. 1,010 kilometers of fiber have already been installed and will be available to the public from June 2022.
With a population of 4.8 million, CAR has some interesting stats that make it a prime location for bitcoin adoption. The report looked at the current data and found:
- Two million mobile subscribers
- Approximately 800,000 unique subscribers
- 300,000 customers with mobile internet
- 100% 3G coverage in Bangui stad city
Buying and Selling Bitcoin
The report states: “Mobile credit is one of the most widely used means of payment in the country, so it is essential to use a well-known model and not disrupt users’ habits. This method of buying and selling bitcoin through mobile credit sellers is a model already established in Goma (DRC) and other African countries.
The authors recommend leveraging the country’s 12,000 mobile credit merchants and installing bitcoin ATMs in cities in safe locations.
Tap into the Lightning Network
The authors of the report believe that bitcoin is best deployed through people’s smartphones using the Lightning Network installed in the phone system.
In an interview with Bitcoin Magazine, co-founder of BigBlock Group bitcoin mining company, Sébastien Gouspillou said:
“We see that smartphone ownership in the sub-region is increasing very quickly, much faster than, for example, the internet or banking. It is on this continued commitment that the spread of Bitcoin in the country can be based, so we are working on the idea of Lightning transactions over the telephone network … We have Samson Mow and other geniuses to work on an adoption with the terms which we have, now, in the country.”
Benefiting from Abundant Hydro
Like El Salvador, CAR has the great advantage of abundant energy resources for bitcoin mining. The report indicates that the hydroelectric potential is phenomenal from 700 to 2000 MW. In his interview with Bitcoin Magazine, Gouspillou said:
“The aim is that mining can contribute to the development of electricity, by helping to finance new power plants. These are huge projects, Big Block Green Services is too small to carry them alone, we need help from major players in the mining industry.”
Bonds to Fund Bitcoin Mining
The authors of the reports suggest that the country is following El Salvador’s lead and selling government bonds as a way to raise capital to build mining facilities:
“Like El Salvador’s Bitcoin bonds, we recommend issuing government bonds on Bitcoin’s Liquid network. These bonds are said to help fund the construction of the region’s solar/hydropower infrastructure and bitcoin mining. The mining infrastructure would also provide a source of income for the Central African Republic. El Salvador will raise $1 billion in bonds thanks to Bitcoin. We recommend meeting with the team of Samson Mow, the architect of The Bitcoin Bonds of El Salvador.”
I asked Gouspilllou if he thought the people of CAR support their president in this bitcoin initiative.
“Yes, everyone has a role to play. Citizens need to take ownership of Bitcoin and educate the people around them. The knowledge will be shared with the citizens we have already introduced to Bitcoin, Lightning and all those who will form the next delegations of Bitcoiners.”
“During my speech at the major CEMAC (Central African Economic and Monetary Community) conference, I insisted that Central Africans should be sure of one thing, and that is that their president’s decision is an excellent decision, that of a visionary. And with this assurance, we, the Bitcoiners of the world, should help this president, and they should help him too, by simply adopting Bitcoin.”