Amid fears of the steep fall of cryptocurrency globally, the Central African Republic (CAR) is still committed to and encouraged by what cryptocurrency is offering. The country has now officially launched its Sango Crypto Hub initiative. This initiative seeks to promote development in the local digital asset market. The Sango project aims to attract businesses and global crypto users/enthusiasts to boost Bitcoin use in the country.
Supported by the National Assembly and the President, the project aims to tokenise CAR’s vast natural resources such as gold, diamonds, uranium, lithium, etc. CAR’s President Faustin-Archange Toudera has lauded the project saying that its vision is to “have a common cryptocurrency and an integrated capital market that could stimulate commerce and sustain growth.” According to the President, the key pillar of the project is to boost financial inclusion because the country’s population can easily access crypto via a smartphone. This opens up investment opportunities and easy access.
This project is working towards the tokenisation of assets as NFTs (non-fungible tokens) for ownership. The project, also dubbed “the Sango Island”, will create a “cryptocurrency economic zone.” This will allow all users to propose, view, and contribute to the project’s future development in different ways. For example, regulation or infrastructure. The most expected benefits of the Sango project will streamline the financial market by providing easy access to the following:
- Low costs
- Minimal bureaucracy
- Faster access to financial services
CAR was the first African country to adopt BTC
The CAR government adopted Bitcoin (BTC) as a legal tender in April 2022. It is the first African nation to legalise the use of Bitcoin. The country’s lawmakers voted for a bill that allowed for the use of BTC alongside the national fiat currency CFA franc. The adoption of Bitcoin made CAR the second country in the world after El Salvador to legalise cryptocurrency as a legal tender.
Seeking Financial Inclusion
The CAR is one of the poorest countries in the world, with a per capita income of $750 per year. Its economy depends on informal mineral extraction. The country has also been locked in a 9-year civil war that has worsened the economic situation. The citizens have limited access to basic services vital for economic resurgence. The country’s private sector has remained small due to limited access to finance and infrastructure needed for growth. Over recent years, the government of CAR has made noteworthy efforts to improve its financial situation by digitising its services.
The country also introduced a digital tax administration to help reform and deliver effective services to its citizens. To aid in the significant steps made by the Central African Republic, the World Bank approved grants for two projects. The $35 million grant for the Public Sector Digital Governance and an additional $30 million for Investment and Business Competitiveness for an Employment project. CAR has been committed to revolutionising its financial sector through digitisation, and its next feasible step was cryptocurrency. But the crypto project is facing opposition as concerns arise over the financial implications of the ambitious project.
Concerns
The World Bank has declined to support the Sango project due to concerns over transparency and implications on the financial situation in the region. According to the 2021 Transparency International Corruption Index, the Central African Republic ranks 154 out of 180 countries. There is also scepticism from various government ministers and opposition members in the Central African Republic. There are fears that implementing and adopting BTC powered by the Sango project will destabilise the country’s currency, the CAR franc.
The CAR franc is a regional currency backed by France and pegged to the euro. It is in six countries: CAR, Cameroon, the Republic of Congo, Gabon, Chad, and Equatorial Guinea. Deep concerns are that implementing the Sango project will destabilise the regional economy. Many regulators, such as the International Monetary Fund (IMF), also warn that there are huge risks associated with adopting crypto as a legal tender.
