The Central African Republic has adopted bitcoin as legal tender, the president's office said on Wednesday , becoming the second country in the world to do so after El Salvador.
Lawmakers unanimously passed a bill that made bitcoin legal tender alongside the CFA franc and legalized the use of cryptocurrencies.
President Faustin Archange Touadera signed the measure into law, his chief of staff Obed Namcio said in a statement.
CAR "is the first country in Africa to accept bitcoin as legal tender," Namcio said.
"This move puts the Central African Republic on the map of the world's most courageous and visionary countries," he said.
But a leading opposition figure challenged the vote and said the move was aimed at undermining the use of the CFA franc.
CAR is one of the poorest and most troubled nations on the planet, locked in a nine-year civil conflict and with an economy heavily dependent on mineral extraction, much of which is informal.
The text of the new legislation covers the use of cryptocurrencies and those who use them in online commerce, "smart contracts... through blockchain technology" and "all electronic transactions."
Cryptocurrency exchanges are not subject to taxation, it is added.
Martin Siegele, a former CAR prime minister who is now an opposition MP, complained that the bill was approved "by proclamation" and some legislators intend to take it to the Constitutional Court.
"This law is a way out of the CFA franc through a means that destroys the common currency," Siegele said.
"It (the law) is not a priority for the country," he said. "The move begs the question: who benefits from it?"
CAR is one of six Central African countries that share the CFA franc, a regional currency backed by France and pegged to the euro. The other members are Cameroon, Chad, the Republic of Congo, Gabon and Equatorial Guinea.
Thierry Virculon, a Central Africa specialist at the French Institute of International Relations (IFRI) think tank, wondered if there was a link between CAR's close ties with Russia.
"The context, given the systemic corruption and the Russian partner facing international sanctions, really encourages suspicion," he said.
Russia's search for ways to circumvent international sanctions is an invitation to be cautious.
El Salvador became the first in the world to use the pioneering virtual currency on September 7.
The introduction was strongly criticised by the International Monetary Fund (IMF).
It warns of "major risks associated with the use of bitcoin for financial stability, financial integrity and consumer protection" and with the issuance of bitcoin-backed bonds.
Many regulators share these concerns, while other critics say anonymous transfers using cryptocurrency are an ideal tool for traffickers and money launderers.
India effectively banned crypto transactions in 2018, only to have the ban overturned two years later by the country's highest court.
China's central bank in September outlawed all financial transactions involving cryptocurrencies.
The huge fluctuations in the price of bitcoin make it risky, as the store of value and long transaction processing times make it impractical for small purchases.
After a relatively calm 2020, the cryptocurrency has experienced unusual fluctuations in 2021, rising from below $33,000 at the start of the year, reaching a peak of over $67,000 before returning to $35,000 in February.
It fell 1.5 percent at 14:00 GMT on Wednesday, trading at 39,328.14 dollars (37,293.7 euros).
Despite reservations, there is also recognition of the utility of digital currencies as a flexible monetary instrument.
Major central banks are considering the possibility of creating a virtual currency in a regulated environment.
The CAR has experienced several moments of peace since gaining independence from France in 1960 and ranks 188 out of 189 countries on the UN Human Development Index, a benchmark of prosperity .
In 2013, the country plunged into a civil war that developed largely along sectarian lines.
The conflict eased after France intervened militarily and elections were held, which were won by Touadéra, although armed groups had ruled most of CAR territory for years.
In 2020, a coalition of rebels advanced on the capital, Bangui, threatening to topple Tawadera when new elections are due.
Russia has sent paramilitaries to help repel the threat and then rebuild much of the rebel-held territory.
The operatives are described by Bangui as military advisers but by France, the UN and others as mercenaries from the Kremlin-backed Wagner group, which has been accused of abuses.