World Bank Won't Back Sango Crypto Center in Central African Republic

The World Bank has expressed concern over the adoption of Bitcoin as legal tender in the Central African Republic (CAR), saying it will not support the newly announced “Sango” cryptocurrency hub.

At the end of April, the President of the Central African Republic, Faustin-Archange Touadéra, established a regulatory framework for cryptocurrencies in the country and adopted Bitcoin as legal tender. On May 24, he announced plans to launch “Sango,” the country’s first crypto center.

Sango is described as the country's first "crypto initiative" - a legal center for cryptocurrency-related businesses, including economic policy, no corporate or income taxes, and the creation of a virtual and real "crypto island".

An official document outlining the Sango project said the country "has been approved by the World Bank for a $35 million development fund for the digitization of the public domain".

However, a spokesperson for the agency told Bloomberg via email that the recently approved grant “is not related to any cryptocurrency initiative, and that the World Bank does not support ‘Sango – the first crypto initiative project.’”

The $35 million grant announced by the World Bank on May 5 aims to update and digitize existing public financial management systems, such as improving digital bank payments.

The World Bank added in its statement that it would be “realistically impossible” for the institution to fund the Sango project, expressing its disapproval of bitcoin adoption in the Central African Republic:

"In addition to environmental shortcomings, we have concerns about transparency and the potential impact on financial inclusion, the financial sector and public finances in general."

News of the adoption of Bitcoin in the Central African Republic also drew the ire of Abbas Mahamat Tolli, the governor of the Bank of Central African States (BEAC), who wrote a scathing letter to the Central African Republic’s finance minister, Hervé Ndoba, shortly after the news broke. .

Tolli wrote in the letter that the new law “indicates that its main goal is to create a central African currency not controlled by BEAC that could compete with or replace fiat currencies,” which he argued would “jeopardize monetary stability.”

The World Bank agrees, saying:

"It is important that relevant regional institutions, such as central banks and banking authorities, are fully consulted and remain dominant."

There is growing dislike for the CFA franc, the official fiat currency of the Central African Republic, which is pegged to the euro. Meanwhile, cryptocurrency exchange KuCoin in March

Cryptocurrency adoption is soaring in Africa, with the number of cryptocurrency transactions increasing by more than 2,500% in 2021, according to a new report from .

It is unclear exactly what the rate of cryptocurrency adoption is within the Central African Republic. According to DataReportal data for January 2022, the country's Internet penetration rate is only slightly more than 7% of the total population, which means that only about 350,000 people are even online.

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