On July 20 and 21, the Central African Republic froze its law on cryptocurrencies, thus complying with the requirements of international financial bodies.
The fuse was lit by the Central African Republic. While the Faustin-Archange Touadéra regime had decided to bet on cryptocurrencies, the Central African Republic had alienated its neighbors. A look back at a decision that had serious consequences...
At the end of April, the country's authorities adopted Bitcoin as the official currency of the country, following the example of El Salvador which had done the same a few months earlier. President Touadéra considered that it was a "historic decision". On April 23, Bangui indicated that it wanted to put 25 million "sango coin", the national bitcoin, on sale from July 210, at a price of 0,10 dollars per unit and wanted to raise 21 million dollars, to hurt the CFA franc.
Towards the weakening of the CFA system?
An especially very quick decision: while cryptocurrencies were previously implicitly prohibited, the RCA had decided to make Bitcoin a flagship project. What provoke the circumspection of the international financial authorities which had, at first, decided not to say anything thinking that the idea of the Central African government was not going to meet its public.
But faced with ultimately significant interest from users, the Bank of Central African States (BEAC) decided to tackle the problem head-on. On July 20, Hervé Ndoba, Central African Minister of Finance and Budget, was summoned to explain his country's financial policy during an extraordinary session of the BEAC board of directors.
Because it is a whole system that the Central African Republic wanted to weaken: in addition to the BEAC, Hervé Ndoba had to convince the member countries of the Economic and Monetary Community of Central Africa (CEMAC) and the African Monetary Union center (UMAC).
CAR seeking development aid
But while we expected a possible banishment of the Central African Republic, finally, a consensus was found: Bangui agreed to freeze the application of its law on cryptocurrencies and to give the BEAC time to develop its own regulations. In reality, the neighbors of Bangui wanted to spare the CAR by giving it a chance to fall into line.
A position that satisfies the African financial authorities but also the International Monetary Fund. The IMF had indeed sent a delegation to Bangui last week to try to understand what was happening on Central African soil and to convince the government to subscribe to the UMAC convention on cryptocurrencies.
What especially disturbed the African financial authorities was when Bangui authorized the convertibility of cryptocurrencies into CFA francs. A risk for the African currency, which risked competition from Bitcoin. Above all, the “sango coin” would have escaped the control of central banks.
Bangui could have stood up to its neighbours, especially when we know how much cryptocurrencies frighten continental authorities. But the CAR is one of the poorest countries on the continent and hopes to find support from international donors. The government of Touadéra has therefore done everything not to enter into an interminable battle.