The Central African Republic (CAR) is on a mission to become Africa’s first country to allow widespread bitcoin adoption. They are the world’s second country (after El Salvador) to officially recognise bitcoin as legal tender for use in regular commerce and taxation.
UNDERSTANDING THE CHALLENGE AHEAD
President Touadéra invited a group of Bitcoiners with diverse expertise to the country’s capital, Bangui, to discuss solutions and advice on issues such as setting up internet access, connecting to the Lightning Network, and developing mining facilities.
According to their report, seven Bitcoin experts spent a week in the country “to better understand the Central African Republic context and identify the main factors that will encourage or inhibit Bitcoin adoption in the country.”
“We arrived intending to explore the country’s strengths and weaknesses without prejudice and propose solutions adapted to the reality on the ground.” —Sébastien Gouspillou
In their recommendations, the group addressed what they saw as CAR’s challenges:
- Limited access to electricity
- Limited access to the internet
- Low rates of mobile phone users
- Lack of organisations dedicated to Bitcoin
- ID card needed to buy a SIM card
The areas where CAR has strengths for adopting bitcoin successfully include:
- Favourable regulations
- Usage of mobile money
- Only 5% of the population has a bank account
ACCESS TO ELECTRICITY
According to the report, CAR has two distinct energy networks. The city of Bangui has better access to electricity than remote, rural areas.
“The energy divide between Bangui and villages requires special attention to avoid an economic divide between cities and isolated areas.”
Despite the abundance of hydro potential, many projects have yet to come to fruition because of lack of financial support.
ACCESS TO INTERNET
While internet connectivity is prevalent in El Salvador, just 11.4% of Central African Republic’s population had internet access in January 2021.
Currently, the Bank of Development of Africa is collaborating with CAR to provide fibre optic internet coverage in 70% of its territory, which encapsulates 90% of the population. A total of 1,010 kilometres of optical fibre have already been installed and will be made available to the public beginning in June 2022.
With a population of 4.8 million, CAR has certain advantages that make it an ideal location for bitcoin adoption. The report examined current data and discovered:
- Two million mobile phone subscribers
- Approximately 800,000 unique subscribers
- 300,000 customers with mobile internet access
- 100% 3G coverage in the city of Bangui
BUYING AND SELLING BITCOIN
According to the report, “Mobile credit is one of the country’s most used means of payment, so it is essential to use a known model and not disrupt users’ habits. This method of buying and selling bitcoin through mobile credit retailers is a model already established in Goma (DRC) and other African countries.”
The authors recommend utilising the country’s 12,000 mobile credit retailers and installing bitcoin ATMs in secure locations throughout cities.
TAPPING INTO THE LIGHTNING NETWORK
The report’s authors believe that bitcoin can best be deployed through peoples’ smartphones using the Lightning Network installed in the telephone system.
Sébastien Gouspillou, the co-founder of BigBlock Group bitcoin mining company, stated in an interview with Bitcoin Magazine:
“We see that the rate of smartphone ownership is rising very fast in the subregion, much faster than internet or banking, for example. It is on this ongoing deployment that the diffusion of Bitcoin in the country can be based, so we are working on the idea of Lightning transactions via the telephone network … We have Samson Mow and other geniuses to work on an adoption with the conditions we have, right now, in the country.”
TAKING ADVANTAGE OF PLENTIFUL HYDRO
CAR, like El Salvador, has a significant advantage in terms of abundant energy sources for bitcoin mining. According to the report, the hydroelectric potential ranges from 700 to 2000 MW. In his interview with Bitcoin Magazine, Gouspillou said:
“The goal 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 will need help from big actors of mining.”
BONDS TO FINANCE BITCOIN MINING
The authors of the report recommend that the country follow El Salvador’s example and sell government bonds to raise capital for mining facilities:
“Like El Salvador’s Bitcoin bonds, we recommend issuing government bonds on Bitcoin’s Liquid network. These bonds would help finance the construction of the region’s solar/hydro energy infrastructure and bitcoin mining. The mining infrastructure would also benefit the Central African Republic with a source of revenue. El Salvador will raise $1 billion in bonds thanks to Bitcoin. We recommend a meeting with the team of Samson Mow, the architect of The Bitcoin Bonds of El Salvador.”
CONCLUSION
I asked Gouspilllou if he believes the people of CAR support their president’s bitcoin initiative.
“Yes, everyone has a role to play. Citizens have to take ownership of Bitcoin, and educate those around them. The knowledge will be shared from the citizens we have already introduced to Bitcoin, to Lightning, and to all those that the next delegations of Bitcoiners will form.”
“I insisted during my speech at the big CEMAC (Central African Economic and Monetary Community) conference that Central Africans should be sure of one thing, and that is that the decision of their president is an excellent one, that of a visionary. And with this certainty, we, the Bitcoiners of the world, should help this president, and they should help him too, by simply adopting Bitcoin.”
