In April 2022, the Central African Republic (CAR) became the first African country, and the second globally, to adopt bitcoin as a legal tender. But the decree did not come with a law to regulate its use. That is about to change, with the CAR government now working on a bill to regulate the use of cryptocurrencies and the tokenization of its natural resources.
This comes roughly five months after the country’s Constitutional Court ruled Sango coin illegal.
- In a press release written in French (Google-translated), President Faustin-Archange Touadera explained that the decision to legalize cryptocurrencies was aimed at developing CAR’s economy by strengthening its place in the international finance sector.
- The government has set up a committee of 15 experts from five ministries.
- These include the Ministry of Mines and Geology; Ministry of Waters, Forests, Hunting and Fishing; Ministry of Agriculture and Rural Development; Ministry of Urban Planning, Land Reform, City and Housing; and the Ministry of Justice, Promotion of Human Rights and Good Governance.
What was said
- The press release reads:
“With access to cryptocurrencies, the monetary barriers existing until now will disappear, [which is] the main objective of the measures adopted by the government [toward] the development of the national economy.”
Why these matters
- The country, whose diamond and gold reserves are self-valued at $285 billion and $60 billion, respectively, suffers from illegal mining and export activities. This undermines the government’s ability to generate revenue.
- Following the adoption of bitcoin as legal tender, the Touader-led government of the CAR announced the launch of its official crypto hub, dubbed “Sango,” through which it intends to tokenize access to its natural resources reserves.
- It remains unclear how Touadera aims to achieve economic growth with cryptocurrency adoption, not least because a significant part of the Central Africa Republic’s economic challenges is war-induced.
- The Central African Republic is the latest African country to announce the formulation of cryptocurrency regulation laws after Morocco announced late last year that it had drafted a cryptocurrency law, adding to a growing list of African countries looking to soften their positions on crypto assets.