As cryptocurrency adoption increases around the world, resource wars and economic crises are being seen to crop up in what analysts have termed as a new kind of high-tech “blood diamond”.
Last month, the Central African Republic (CAR) became the second country to adopt Bitcoin following El Salvador in a move that has baffled many experts and attracted criticism from the International Monetary Fund and more recently, the regional Bank of Central African States.
Given that in the only other existing case study, after close to a year since its adoption, 86% of businesses in El Salvador were found to have never carried out a single transaction in Bitcoin, the prospects in CAR do not look positive.
A lot of the confusion is tied to the fact that CAR is ranked among the top 10 poorest countries according to the World Population Review. This raises a major question about its readiness to adopt Bitcoin with its high tech requirements leading to the follow up of “Why now?”
Some analysts say CAR’s adoption of crypto is meant to annoy the IMF and foreign-owned money transmitters because it is difficult to see a practical angle where the move could possibly attract any investors.
CAR ranks poorly in terms of the infrastructure needed as it ranks poorly in terms of internet access and only 14% of the population have some access to electricity. It is unclear how the 90% relying on wood and charcoal could see their conditions improved by Bitcoin as was claimed by the CAR president in the Bitcoin announcement statement.
CAR also has major human rights issues. Human Rights Watch and United Nations experts recently said that since 2019, Russian fighters have been torturing, raping, and executing civilians across CAR with complete impunity.
CAR’s government relies on foreign military assistance to keep control, including through the Wagner Group, a private military security contractor with apparent links to the Russian government, and with a presence in other African countries, as well.
Since its invasion of Ukraine, Russia has had sanctions imposed on it but Bitcoin has enabled it to continue funding its global operations including within Africa. Experts believe that this is enabling Russia to expand its influence in sub-Saharan Africa.
Still on the continent, amid reports of paramilitaries committing crimes against humanity in Ethiopia, Cardano developers are collaborating with Ethiopian authorities to develop digital surveillance tools, including a digital ID and records system. Cardano plans to launch a crypto payment network in Ethiopia before expanding to the rest of Africa.
Throughout history, the intentions of European powers and their private companies have been questionable because they are known to capitalize on conflict.
The term “blood diamond” arose to define any diamond sold to found military action in diamond-rich areas and looking at the current trend, cryptocurrencies could open the door for this exploitative use case scenario.