A battle is underway in Africa to determine whether its countries will adopt CBDCs or Bitcoin. Many sub-Saharan African central banks are exploring Central Bank Digital Currencies (CBDC) and have stated plans to roll them out in the near future. This comes as government praise for CBDCs is mounting, and the International Monetary Fund (IMF) is posturing to aid countries in their adoption.
However, many African countries have also taken steps to advance their adoption of Bitcoin (BTC). The Central African Republic (CAR) is leading the charge, which became the second nation in the world to adopt Bitcoin as legal tender in April 2022.
The Battle for Digital Currency is Growing
It seems that there is a struggle between the existence of CBDCs, supported by the IMF, and Bitcoin in African countries. Recently Nigeria introduced the e-Naira in October 2021, which was the second country after the Bahamas to roll out a CBDC.
Furthermore, the South African Reserve Bank is also working on a wholesale CBDC which can only be used by “financial institutions for interbank transfers.” On the contrary, the Bank of Ghana is testing a retail CBDC called the e-cedi to be used by a digital wallet app.
Uganda’s central bank is also working on introducing a digital currency soon but it hasn’t banned the usage of Bitcoin (BTC) in the nation.
The President is a Mathematician
Greg Foss famously said “Learn math, sell your bonds and buy bitcoin.” Luckily the President of the Central African Republic, Faustin-Archange Touadéra, has two doctorates in mathematics. He earned his first doctorate from Lille University of Science and Technology in France and the other from the University of Yaoundé in Cameroon in 2004.
A New Bitcoin Hub
The President confirmed that the first Bitcoin Hub will be called Project Sango. At the hub Bitcoin companies will have easier access to natural resources such as uranium, diamonds, and gold. Another plan is to create a citizen by investment option, which would include zero-rate income and corporate taxes.
This is a great start for the Central African Republic, but they’re up against several central banks in Africa working on CBDCs in parallel.
Will Africa be fighting the ground war for Bitcoin vs CBDCs? We think that in the end the best math will win.