Central African Republic Bitcoin Adoption Facilitated State Capture Rather Than Financial Inclusion

Source: Btcpeers Original Title: Central African Republic Bitcoin Adoption Facilitated State Capture Rather Than Financial Inclusion Original Link: https://btcpeers.com/central-african-republic-bitcoin-adoption-facilitated-state-capture-rather-than-financial-inclusion/ The Central African Republic’s cryptocurrency ventures enabled foreign criminal organizations and deepened elite control rather than improving financial inclusion, according to a new report. The Global Initiative Against Transnational Organized Crime published research titled “Behind the blockchain: Cryptocurrency and criminal capture in the Central African Republic.” The report examined CAR’s Bitcoin legal tender adoption, Sango Coin launch, and CAR memecoin project. These programs were rolled out in a fragile state with limited infrastructure and oversight.

Researchers stated the initiatives appeared designed to enrich insiders while opening channels for foreign influence. President Faustin-Archange Touadéra was surrounded by crypto enthusiasts, pro-Russian businesspeople, and controversial magnates, the report claimed. Nicolae Bogdan Buzaianu, linked to alleged illegal timber trafficking, and Émile Parfait Simb, connected to multiple fraud cases, were named as examples. The report specifically criticized a July 2023 law allowing tokenization of national resources including oil, gold, timber and land.

Only 15.7 percent of CAR’s population has electricity access. Less than 40 percent hold mobile phone subscriptions. The nation’s GDP per capita sits at $467. Most citizens lacked infrastructure and resources to trade digital currency meaningfully, researchers noted.

Limited Access Prevented Widespread Adoption Among Citizens

The report argued CAR’s crypto programs were tailored more to foreign investor interests than population needs. An impoverished population exposed to mass executions, torture and gang rape cannot engage in crypto investments meaningfully. CAR made Bitcoin legal tender in April 2022, becoming the second country after El Salvador to do so. The country repealed the legislation in March 2023 after pressure from the Economic and Monetary Community of Central Africa and the International Monetary Fund.

Only 10 percent of CAR’s population has internet access. More than 85 percent of residents lack electricity. These infrastructure barriers made widespread digital currency adoption highly unlikely from the start. The GI-TOC report noted Sango Coin sold less than 10 percent of its target supply. The CAR memecoin trades at $0.004105, down more than 93 percent over the past year.

Grassroots approaches contrast with CAR’s top-down implementation that failed to address basic infrastructure needs. Such alternatives demonstrate potential for financial inclusion when properly designed for local contexts.

Developing Nations Face Infrastructure Requirements For Crypto Success

The CAR case raises questions about cryptocurrency viability in countries lacking basic infrastructure. Economic instability alone does not guarantee successful crypto adoption. Nations require minimum levels of electricity, internet connectivity, and public education for digital currency programs to function. The report’s findings suggest government-led crypto initiatives in fragile states risk exploitation by criminal networks and corrupt officials.

Several African nations continue exploring digital asset frameworks despite CAR’s failure. Nigeria, South Africa, Kenya and Ghana have shown interest in cryptocurrency regulation. These countries possess stronger infrastructure and larger populations with internet access compared to CAR. Regulatory clarity and transparent governance remain essential for preventing criminal capture of national crypto programs.

The International Monetary Fund has warned developing countries about risks associated with cryptocurrency adoption. Volatility, financial stability concerns, and consumer protection issues present challenges for nations with weak institutions. CAR’s experience demonstrates that crypto adoption requires more than legislative declarations. Functional infrastructure, educated users, and robust oversight mechanisms are necessary preconditions for success.