President Faustin-Archange Touadéra announced on July 3 that his government was officially launching a “new digital system powered by blockchain technology.” CAR is developing its own cryptocurrency, the Sango Coin, he said, with plans to create a “crypto island” — a special economic zone in the metaverse — to help turn the country into the “first crypto- African hub” with zero taxation.
“The alternative to cash is cryptocurrency,” Touadera said. “For us, the formal economy is no longer an option.”
In April, CAR became the first country in Africa (and only the second in the world, after El Salvador) to adopt bitcoin as legal tender. Tonga announced similar plans earlier this year, but has yet to enact legislation.
CAR has been under international sanctions for nearly a decade as civil war rages, making it difficult for the country to access financial markets. The cryptocurrency move is widely seen as aimed at least in part at helping circumvent sanctions on CAR’s ally Russia, but it comes at a particularly inauspicious time as the price of bitcoin is plummeting. free and many cryptocurrency platforms are threatened with bankruptcy.
With 57% of Africa’s population unbanked, Touadéra says he would like the Sango Coin to become the currency of CAR’s “new generation”. As the Sango Coin is digital, it does not fall under the control of the central bank.
Along with deepening its ties with heavily sanctioned Russia, Bangui is seeking to counter its financial exclusion from the rest of the world while reducing economic dependence on former colonial power France, which is tied to the CAR. by its paper currency, the CFA France. Creating a national physical currency would be difficult, however, so the decentralized operations center of cryptocurrencies remains attractive despite their volatility.
Various countries across the continent are considering legalizing cryptocurrency, such as Uganda, or creating their own official digital currency, such as eNaira in Nigeria.
A report from blockchain data platform Chainalysis last fall found that the African cryptocurrency market grew by more than 1,200% between 2020 and 2021.
Despite the growing popularity of digital currencies, lack of internet access is hampering their adoption in Africa. The CAR is no different; according to the UN, it is the second least developed country in the world, with only 14.3% of the population having access to electricity, not to mention the internet.
Nevertheless, Touadéra believes that crypto is the key to the future.
“The ambitious strategy to build a prosperous economy can only rely on new technologies that have taken the world by storm and taken money to another level,” he said, “with Bitcoin as the word of order”.