In late December 2022 the Central African Republic announced a delay to the planned listing of its “national digital currency”—Sango Coin—on a cryptocurrency exchange until the first quarter of 2023. Further delays to the listing are likely, and we expect that investment flows into Sango Coin will remain low.
Why does it matter?
Following the official launch of the Sango Coin project in July 2022, the government called the adoption of cryptocurrency as legal tender (alongside the CFA franc) “a decisive step towards opening up new opportunities for our country”. However, given the significant physical barriers to using cryptocurrencies in the country (including low internet penetration, poor access to electricity and limited mobile-phone use), combined with limited upside potential (compared with the stability offered by the CFA franc) and ongoing policy uncertainty, we have long expected that businesses and consumers would not adopt cryptocurrency widely. We continue to believe that the country’s ability to attract investment through cryptocurrency is doubtful.
The government has not yet announced which cryptocurrency exchanges Sango Coin will be launched on. The government cited “current market conditions” as the reason for the delay in the planned listing, with many cryptocurrencies having lost significant value in recent months. The government launched Sango Coin with a stated aim of raising some US$1bn, but the project has faced significant operational difficulties. Investment inflows into Sango Coin have been very low, according to official data, falling far below initial government expectations.
The government initially planned a programme to allow foreign investors to buy citizenship for US$60,000 worth of Sango Coins, in addition to providing incentives, such as tax breaks, for firms investing in commodity mining through cryptocurrencies. However, the Constitutional Court ruled in September 2022 that cryptocurrency could not be used to acquire a Central African passport or residency permit. In announcing the delay to the planned listing, the government also said that further updates on investment incentives would be made in the coming weeks.
Further delays to the listing of Sango Coin on a cryptocurrency exchange are likely, given the limited take-up to date, significant barriers to widespread adoption and low levels of policy certainty. We continue to expect that investment flows into Sango Coin will remain low.