Last Updated: 16 June 2022
Despite the dire market conditions, President Faustin-Archange Touadéra is optimistic about bitcoin and his country’s decision to adopt it as legal tender.
Heart to Heart
President Touadéra focuses on the long term in a tweet that came online yesterday.
Understanding #Bitcoin is crucial to acknowledge its disruptive power to bring long term prosperity. Mathematics don't account for human emotions.Future generations will look behind at these very moments to 🥳 our strength & unity in choosing the right path during hard times #BTC
— Faustin-Archange Touadéra (@FA_Touadera) June 14, 2022
“Understanding Bitcoin is crucial to recognising the disruptive power it has to bring long-term prosperity,” he wrote. “Mathematics does not take into account human emotions. Future generations will look back on these moments to celebrate our strength and unity to choose this path in tough times.”
Tough times, if you look at the price, are certainly tough. The bitcoin price is skirting the $20,000 mark, Celsius and Three Arrows Capital are struggling to meet their payment obligations and, according to bitcoin expert Jason Yanowitz, things are just starting to get really ugly.
Tough start legal tender
Since it was announced on the Central African Republic’s (CAR) Facebook page on 27 April that bitcoin had become legal tender, the crypto-currency has fallen 49% in value. The CAR is the second country, after El Salvador, to enshrine bitcoin in law as a means of payment. The other legal tender is the Central African CFA franc (XAF), a regional currency issued by the Banque des États de l’Afrique Centrale.
The XAF is pegged to the euro (formerly the French franc) and is backed by the French central bank. Criticism of the XAF has been voiced from the countries using it, which in addition to CAR include Cameroon, Chad, Equatorial Guinea, Gabon and Congo. As in El Salvador, the participating countries have no influence on monetary policy, as their currency is pegged to the euro.
Like El Salvador, one of the XAF countries now has bitcoin. This makes it dependent on pre-programmed inflation, but also on valuation by the financial markets as a risk-asset. So times are hard, but for the coming generations, President Faustin-Archange Touadéra is optimistic.