In a statement on Wednesday, April 27th, 2021, Obed Namsio, chief of staff to President Faustin Archange Touadera, confirmed that the president of Central African Republic, Faustin-Archange Touadéra had signed a bill into law to make crypto a legal tender alongside the CFA franc. This comes less than a week after the country’s parliament unanimously enacted the new law.
“The purpose of this Law is to govern all transactions related to cryptocurrencies in the Central African Republic, without restriction, with unlimited power of issue in all its transactions and in any capacity carried out by natural or legal persons, public or private. As such, it sets the legal framework and the procedures for implementing and securing these transactions, the offences, penalties and the means of proof in this regard,” the new law provides.
Here Are The Key Provisions Of The Law
Who Does The New Law Apply To?
The new law applies to:
- Companies or individuals under public or private law who trade cryptocurrencies online.
- Companies or individuals under public or private law whose job is to make cryptocurrency services available to the public through information and communication technologies.
- Companies or individuals under public or private law who use BLOCKCHAIN technology to make smartcontracts to obtain goods or services.
- Additionally, transactions involving cryptocurrencies, regardless of their nature, whether they take the form of a purchase, a withdrawal, or a sale, are subject to the terms of this law.
- However, exchanges and transactions involving cryptocurrency platforms, on the other hand, are subject to the any laws already in place applicable in commercial and civil issues, and in this case, those provided for by the appropriate laws in place.
How Are Cryptocurrency Operations Governed Under The New Law?
Under the new law, the following rules govern the operations of cryptocurrency:
- It is entirely up to the market to establish the exchange rate between cryptocurrencies and the Central African Republic’s national currency, the CFA.
- In the Central African Republic, all electronic transactions can be stated in legally recognized cryptocurrencies and are governed by regulations to be released by a national agency for the regulation of crypto transactions created under the law.
- When cryptocurrencies are offered for the purchase or sale of goods or services, any economic Agent is obligated to accept them as a form of payment from the buyer or seller.
- While the private sector is free to carry out its operations as it sees fit, the state provides alternatives that allow users to conduct transactions in cryptocurrencies and to have automatic and instantaneous conversion of cryptocurrencies into local currency in the Central African Republic, and vice versa.
- Legal texts, to be released by national agency in charge of crypto regulations, define and govern the parameters and operation of automatic and instantaneous conversion and issuance alternatives as well as other financial instruments.
- Cryptocurrency miners are considered independent actors in the Central African Republic and are required to declare any profits they make from their operations in legal tender.
- Taxation of cryptocurrency exchanges is also mandated by the law. Furthermore, any earnings generated by the operations of cryptocurrency traders are subject to the regular taxation laws. All taxes can be paid in cryptocurrency using sites that have been recognized and authorized by the Central African Government.
- Those who violate the provisions of this law may face a prison sentence ranging from ten (10) to twenty (20) years in prison as well as a fine ranging from one hundred thousand FCFA to one million FCFA (100,000 FCFA to 1,000. 000,000 FCFA). This law applies to entities that provide certain services related to virtual currencies but do not register with the National Agency for the Promotion of Virtual Currency.
Download The New Crypto Law Here
The new crypto law is available for download here: https://afrikanheroes.gumroad.com/l/downloadcryptolawcentralafricanrepublic
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh