Concerns of international and regional financial institutions
First unveiled last May, the Sango project (one of the country's official languages) essentially aims to make the Central African Republic an international investment and cryptocurrency development hub.
The second least developed country in the world according to the UN, Central African Republic became last April the first country in Africa and only the second in the world (after El Salvador) to adopt Bitcoin as its official currency.
The adoption of digital finance by this country torn apart since 2013 by a civil war has raised reservations from several international and regional financial institutions.
Central African President Faustin Archange Touadéra (pictured) announced on Sunday, July 3, the official launch of the construction site of his own cryptocurrency, Sango, and the first "African zero-tax crypto-hub."
"The Sango Coin will be the new generation currency of the Central African Republic," he said at an "online event" dedicated to the "genesis of Sango or the rise of a new digital monetary system" powered by Blockchain technology.
"The alternative to cash is cryptocurrency. For us, the formal economy is no longer an option," added the head of state, indicating that the Sango Coin will help attract investors and facilitate access to the country's natural resources.
"The Central African Republic is sitting on a mountain of untapped wealth, and Sango Coin will be the direct access to our resources for the whole world," he said, without elaborating.
The Central African president, on the other hand, believed that cryptocurrencies are the solution to fight against financial exclusion in the Central African Republic and Africa.
"The smartphone is the alternative to traditional banking, cash and financial bureaucracy," he launched, lamenting the fact that Africa, "where 57% of the population is unbanked," suffers from a lack of infrastructure that makes "almost inaccessible financial services to many people."
In the wake of Bitcoin's adoption as an official currency, the International Monetary Fund (IMF) had called for "not seeing Bitcoin as a panacea for the economic challenges facing Africa."
The Banking Commission of Central Africa (COBAC), the institution through which the Central Bank common to the CEMAC countries (BEAC) regulates banking activities, had recalled that it is "forbidden to convert, settle or cover in currency or CFA francs, transactions relating to cryptocurrencies or having a link with them."
The World Bank, for its part, expressed "concerns about the transparency of the project as well as its potential implications for financial inclusion, the financial sector and public finance in general, in addition to environmental aspects."
Critics of the Sango project also consider it "unrealistic" in a country where the Internet penetration rate is about 11% and the electrification rate is only 14.3%.
Touadéra also announced the launch of a "Crypto Island", a platform that will allow the Sango cryptocurrency to become "the catalyst for the tokenization of the vast natural resources" of the Central African Republic.
No details have been released on how and when the Central African cryptocurrency will be created and the "Crypto Island", billed as a zero-tax free zone where palaces, casinos, a large stadium and a water park would be built.