Central African Republic
Current Economic Situation in the Central African Republic Source: Blackpast The Central African Republic (CAR) is one of the poorest countries in the world. Its economic situation is very fragile as it faces several challenges. According to Statista, its GDP per capita is $537.6 as of 2024. The CAR is a landlocked country located in the heart of Africa’s “central” region. It is bordered by the Democratic Republic of the Congo to the South, Chad to the North, South Sudan to the East, and Cameroon to the West. The capital and largest city of the country is Bangui. Bangui was a French colony in the 19th century, and French became one of its official languages. The country gained independence on August 13, 1960. They are blessed with abundant natural resources such as diamonds, timber, and gold. Despite this, 70% of the people are living in extreme poverty. They depend solely on agriculture and the export of natural resources for sustainable growth. Their current economic situation can be divided into different sectors, namely; Since its independence from France, the Central African Republic has struggled with internal conflict, coups, population displacement, and political instability, which has led to the decline of its Gross Domestic Product (GDP). An armed group known as ‘Seleka’ from the north of the country controls most of the rural area. This group has prevented the government from establishing authority and providing public services, which has damaged infrastructure, displaced people, and disrupted economic activities. This insecurity has restrained investors’ access to their markets and placed further constraints on their economies. Farmers cannot access their farms or even transport their goods. The Central African Republic is recognized for its agricultural sector, which is the backbone of its economy. This sector contributes almost half of its GDP, as almost 74% of its population is involved in agriculture. The primary food crops include cassava, millet, maize, and plantains, while the cash crops include cotton, coffee, and tobacco. They consume the food crops and export the cash crops to other countries. They also practice livestock farming. The production of these crops has declined due to conflict and insecurity. Lack of quality farming equipment and bad roads have also contributed to the decrease in production. The Central African Republic is blessed with plentiful natural resources, including gold, diamonds, and timber, which can improve its economic situation. However, corruption, illegal exploitation, and lack of transparency have led to the government’s loss of revenue. Insufficient infrastructure has led this country to continue to wallow in poverty. Poorly constructed roads, limited electricity, lack of clean water, and poor communication networks are discouraging situations the inhabitants struggled with. Additionally, companies are unable to operate efficiently due to an unreliable electricity supply. Most of these companies rely on generators, which are very expensive to maintain. This country relies on foreign aid and NGOs to provide basic services that the government does not provide. The persistent conflict and political instability have led many inhabitants into crises and a need for basic needs. With the help of foreign aid, they receive support ranging from food, healthcare, and funds. The country suffers from inflation due to the high price of food, fuel, etc., which decreases its standard of living. According to Global Finance, it is one of the poorest countries, as most of the population lives on less than $2 a day. Crypto Law In the Central African Republic Source: Kessing Platform In April 2022, the National Assembly of CAR made Bitcoin a legal tender. It became the first country in Africa to adopt this law. El Salvador and the Central African Republic are the only two countries in the world that have adopted Bitcoin as legal tender. This move was expected to modernize the economy and put it in the spotlight for blockchain technology. The purpose was to attract foreign investors and boost the economy. Due to the volatile nature of cryptocurrency and the nation’s economic challenges, there were many concerns during the adoption. The concerns eventually became reality as the economy started witnessing a negative turn. In response, the country’s parliament repealed the legislation that gave bitcoin and other cryptocurrencies the legal tender status, and thus, it ceased to be legal tender. This legislature was adopted in March, 2023. Going forward, the IMF in a detailed report has this to say about the regulation of crypto assets in CAR: Current State of Crypto Adoption in the Central African Republic Source: CryptoSlate When Bitcoin was enforced, there was much skepticism due to concerns over inadequacy. “Alfred Kammer, Director of the IMF’s African Department, voiced concern that the adoption of crypto assets as legal tender raises significant risks to financial stability, consumer protection, and financial integrity.” Following the adoption of Bitcoin as a legal tender, it was revised after a year due to economic challenges maintaining it. For digital currency to be successful, it needs an internet connection, which is absent in CAR. According to data by the World Bank, only 10% of the population can access the internet. Another hindrance is the lack of sufficient electricity, as only 14% of citizens enjoy electricity. Also, they have limited access to technology. In 2022, the president of the Central African Republic introduced the Sango coin. This Sango project included creating “Crypto Island” in the Oubangui River. This was to act as a hub for crypto-related businesses with zero taxes. The president also announced the plan to tokenize the country’s natural resources. In addition to Sango Coin, the plan includes boosting the digitization of technology to rebuild the country, which will attract investors. The President added that the Sango coin aims to tokenize the country’s natural resources, such as diamonds, gold, and uranium. In turn, this will attract investors to buy from them, thereby boosting economic growth. This is dependent on improving internet access and educating the population on basic cryptocurrency fundamental analysis. Also, it will address the inherent volatility of cryptocurrencies and ensure that this adoption does not lead to further economic instability.” It
Bahamas
Current Economic Situation in the Bahamas Source: The Bahamas Mission The Bahamas Mission can be largely divided into two sectors—tourism and financial services. As a small country, the Bahamas relies heavily on transactions with neighboring countries. Due to proximity, its major partner is the United States of America. The Bahamas gained independence in 1973 and has expanded to have the third-largest per-capita income in the Western Hemisphere (only behind Canada and the United States). According to the Bahamas mission, the tourism sector alone accounts for almost 50% of the country’s Gross Domestic Product (GDP). It is directly or indirectly responsible for about 70% of the Bahamian workforce. On the other hand, the financial sector is responsible for about 8.9% of the country’s GDP. The sector includes; While the country is trying to strengthen its market position, natural disasters, and climatic changes have discouraged its progress. Also, the Bahamas has 700 islands, making it difficult for commercial banks to have physical branches or ATMs in some regions. Crypto Law In the Bahamas Source: Currency Exchange International. As a country ready to strengthen its economic prowess, the use of cryptocurrency is highly welcome in the Bahamas. In October 2020, the country launched the Sand Dollar, the world’s first digital currency. Citizens and inhabitants can use it for their daily transactions. The introduction of this digital currency had a positive impact on both small and large-scale businesses. The COVID-19 pandemic could have facilitated its use. However, payment is instant and not geo-restricted. “Brandon Kemp, founder of Tin Ferl, a popular pop-up food park in Nassau said, when they first heard about the sand dollar, they were extremely excited. The amazing thing about the sand dollar is that there are no fees or transaction costs. So, if they need to pay one of their staff, they can do it right there at the moment; they receive it literally within seconds, and everybody is happy with that.” The introduction of Sand Dollars was only the start of further crypto developments. In November 2022, Prime Minister Philip Brave Davis opened an FTX office for a digital asset exchange in the Bahamas. This creation also ushered in the Digital Assets and Registered Exchanges (DARE) Act. Current State of Crypto Adoption in the Bahamas The adoption of crypto in the Bahamas skyrocketed after the creation of Sand Dollars. However, the increased activities of global crypto exchange platforms like FTX in the country were eye-catching. The FTX company collapsed, and the enthusiasm grew cold. In November 2022, CoinDesk published an article that triggered a massive withdrawal from FTX. This led to the collapse of FTX, and some users could not access their investments. A few years later, some key executives pleaded guilty to defrauding FTX users. The collapse of FTX in 2020 began another era for crypto adoption in the Bahamas. To prevent a repetition of the FTX collapse, the government introduced the Digital Assets and Registered Exchanges Act 2024 (DARE 2024). “Prime Minister Philip Davis stated, building upon the foundation laid by the DARE Act, 2020, the legislation introduces comprehensive reforms designed to address the evolving landscape of digital assets and cryptocurrency markets.” The DARE Act aims to solidify existing crypto laws to ensure investors’ portfolios are safe from bugs, fraud, and cyber scams. The DARE Act 2024 also encourages more crypto adoption and further innovations in the Bahamas. This is a testament to our commitment to robust risk management. We have created a framework that not only focuses on investor protection but also encourages responsible innovation.” Christina Rolle, Executive Director of the Securities Commission. Factors Driving Adoption Several factors are driving the adoption of cryptocurrency in the Bahamas. Notable ones include; The DARE Act 2024 has ignited more confidence in crypto enthusiasts. The act assures more investors because there is governmental scrutiny to prevent the misappropriation of funds. As the days grow, the number of crypto users is increasing. As of October 4, the market capitalization of cryptocurrency is over $2 Trillion. A 100% increment over a year implies that more interested users want to benefit from the adoption of cryptocurrency. The Bahamas is no different. More people are beginning to show interest, and the numbers are expected to rise in the coming days. The Sand Dollar is a revolutionizing currency that sets the pace for the future. With over 100,000 registered wallets, about 25% of Bahamian citizens use the Sand Dollar for their daily transactions. The government holds seminars across the country to increase awareness about Sand Dollar. Before the end of 2025, the 1,800 registered merchants and 9 SandDollar authorized financial institutions should increase exponentially. The Bahamas borders the United States, Haiti, Cuba, and the Turks and Caicos Islands. Known for its dependency on tourism and financial strength from visitors, the Bahamas will experience a rise in cryptocurrency adoption. The United States is improving its use of cryptocurrencies. The two lead aspirants of their coming elections are pro-crypto. No matter who wins, their involvement in the use of cryptocurrency will impact the Bahamas. Cryptocurrency Usage in Various Sectors Source: Coindesk. The use of cryptocurrency in the Bahamas is still developing. As a result, cryptocurrency as a payment method or medium of exchange has not yet been fully embraced, though it is gaining popularity. However, the DARE Act 2024 is a big step in the nation’s approach to the use of digital assets. On the other hand, the Sand Dollar is generally accepted. As a currency approved by the Central Bank of the Bahamas, it is a legal tender across every sector of the country. The Sand Dollar has the same authority as the Bahamian Dollar. This digital currency can be easily used in mobile wallets or physical cards. The bigger news is that a full crypto adoption in the Bahamas will solve the holding or transaction limit challenge. Citizens can trade as much volume as they want. Advantages and Challenges Facing Crypto Adoption in the Bahamas Source: Elemental Crypto Crypto adoption in the Bahamas