The people of Central African Republic (CAR) are on a mission to be the first country in Africa to facilitate widespread adoption of Bitcoin. They are the second country in the world (after El Salvador) to officially adopt Bitcoin as legal tender for use in regular commerce and to pay 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.
Understand the challenge ahead
President Touadéra invited a group of bitcoiners with expertise in various fields to the country’s capital, Bangui, to advise the country on issues such as establishing 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 to identify the main factors that will promote or inhibit the adoption of bitcoin in the country,” according to their report.
“We came with the intention of exploring the country’s strengths and weaknesses without prejudice and proposing solutions adapted to the reality on the ground.” – Sébastien Gouspillou
In its recommendations, the group addressed the challenges of CAR:
- Little access to electricity
- Low access to the internet
- Low rates of cell phone users
- Lack of educational organizations dedicated to Bitcoin
- ID card required to purchase a SIM card
Areas where CAR has strengths for successful Bitcoin adoption include:
- Favorable regulations
- Use of mobile money
- Only 5% of the population have a bank account
access to electricity
The report highlights that there are two distinct energy networks in Central African Republic. Access to electricity is better in Bangui city. Less so in remote, rural areas.
“The energy gap between Bangui and the villages requires special attention to avoid an economic divide between cities and remote areas.”
Despite the great potential for 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 Central African Republic was estimated to be only 11.4% of the population in January 2021.
Currently, the Bank of Development of Africa is working with the CAR to achieve fiber optic internet coverage in 70% of its territory, which includes 90% of the population. 1,010 kilometers of fiber optics have already been laid and will be open to the public from June 2022.
With a population of 4.8 million, CAR has some interesting statistics that make it a prime location for Bitcoin adoption. The report looked at the current data and found:
- Two million mobile customers
- Approximately 800,000 unique subscribers
- 300,000 customers with mobile Internet access
- 100% 3G coverage in Bangui city
Buying and selling bitcoin
The report states: “Mobile credit is one of the most used means of payment in the country, so it is important to use a well-known model and not to disrupt users’ habits. This method of buying and selling bitcoin through mobile loan dealers is a model already established in Goma (DRC) and other African countries.”
The authors recommend taking advantage of the country’s 12,000 mobile loan dealers and installing bitcoin ATMs in cities in safe locations.
Tapping into the Lightning network
The report’s authors believe that the best way to deliver Bitcoin is through people’s smartphones using the Lightning Network installed in the phone system.
In an interview with Bitcoin Magazine, Sébastien Gouspillou, co-founder of bitcoin mining company BigBlock Group said:
“We see that the number of smartphone owners in the sub-region is increasing very quickly, much faster than, for example, internet or banking. This ongoing deployment can base the proliferation of bitcoin in the country, so we’re working on the idea of Lightning transactions over the phone network… We’ve got Samson Mow and other geniuses to work on an adoption with the terms we have, right now now, in the country.”
Use enough hydro
Like El Salvador, CAR has the great advantage that there are plentiful sources of energy for bitcoin mining. The report describes that the hydroelectric potential of 700 to 2000 MW is phenomenal. In his interview with Bitcoin Magazine, Gouspillou said:
“The goal is that mining can contribute to the development of electricity by helping fund new power plants. These are huge projects, Big Block Green Services is too small to carry alone, we will need help from big mining players.”
Bonds to finance bitcoin mining
The report’s authors suggest that the country follows El Salvador’s lead and sells government bonds to raise capital to build mining facilities:
“As with El Salvador’s bitcoin bonds, we recommend issuance of government bonds through Bitcoin’s Liquid network. These bonds would help fund construction of the region’s solar/hydro energy infrastructure and Bitcoin mining. The mining infrastructure would also benefit the Central African Republic as a source of revenue. El Salvador will raise $1 billion worth of bonds thanks to Bitcoin. We recommend meeting the team at Samson Mow, architect of The Bitcoin Bonds of El Salvador.”
I asked Gouspilllou if he thinks the people of Central African Republic support their president in this bitcoin initiative.
“Yes, everyone has a role to play. Citizens need to take possession of bitcoin and educate their surroundings. The knowledge will be shared by the citizens we have already introduced to Bitcoin, Lightning and all those who will form the next delegations of Bitcoiners.”
“I insisted during my speech at the major CEMAC (Central African Economic and Monetary Community) conference that Central Africans should be certain of one thing, and that was that their President’s decision was an excellent one, that of a visionary. And with that certainty, we, the bitcoiners of the world, should help this president, and they should help him too, simply by adopting bitcoin.”