Home Uncategorized Bitcoin, Sango Coin and the Central African Republic
Bitcoin, Sango Coin and the Central African Republic
In spring 2022, the Central African Republic (CAR) became the first African country to adopt Bitcoin
tickers down
as legal tender.
As the second country globally to recognize Bitcoin in such a way, AUTOMOBILE has followed in the footsteps of El Salvador. Since then, El Salvador has boasted booming tourism numbers, a resilient economy and a healthy amount of free PR after allowing its citizens to make everyday purchases with the seminal cryptocurrency.
CAR, a significantly less economically developed economy than its Central American counterpart, hopes to emulate El Salvador's success. Despite the nation's vast wealth of natural resources, the CAR is plagued by economic mismanagement, scant private and foreign investment, and systemic government issues.
It is one of the poorest countries in the world's poorest continent, ranking right at the bottom of the World Bank's Human Development Index. To make matters worse, up to 85% of the country's exports are held in French treasuries, while its currency of choice, the CFA franc, is heavily biased towards economic development in France. Consequently, using a neutral, open source and censorship resistant monetary system like Bitcoin can not only benefit but also emancipate the country.
President Bitcoiners
Similar to El Salvador, the CAR law would make Bitcoin "official money". Naturally, this decision was praised by Bitcoin advocates around the world. Plus, CAR president Faustin-Archange Touadera, a mathematician and Bitcoin supporter on social media, seemed inclined to support the adoption of the unique cryptocurrency. The pro-Bitcoin tweets smack of the laser-eyed president of El Salvador, Najib Bukele.
However, the celebration and support for the country among the Bitcoin community was short-lived as, despite official visits by Bitcoin-only proponents – including Galoy Money – the country launched its own token project. Just days after the Bitcoin law went into effect, the country surprised the crypto community by announcing the creation of a crypto token called Sango. The population of 5 million will also benefit from a "crypto hub" in the capital Bangui.
A francophone contingent of established bitcoiners visit the car in May. Source: Twitter
Cointelegraph sat down in Senegal, West Africa with Mamadou Moustapha Ly, the Central African technician who oversaw the development of Sango Coin, to ask about the project's development. A payments expert, Lee also runs fintech startup Kete Cash. Lai shed light on the creation of what he called a "token, not a currency," dubbed Sango. Sango is the token that will accompany the country's plans to adopt Bitcoin as legal tender.
Stay safe in Web3. Learn more about Web3 Antivirus →
Cointelegraph talks to Ly in Senegal.
First, Ly noted that the Bitcoin-as-legal-tender law clearly states that the country will adopt Bitcoin. There is no mention of other cryptocurrencies or even Sango Coin. He made a clear distinction between Sango and Bitcoin:
"The law says that the digital currency that is legal tender is Bitcoin. We recognize this as our official currency. […] The Sango coin is a project for the state of the Central African Republic."
Sango Coin offers attractive incentives to foreign investors, including citizenship by investment and eventually a CAR passport, as well as management advantages. In a sense, buying a Sango is a way to buy residency in the country, without touching government-issued fiat currencies.
A significant effort
But why was this necessary? El Salvador hasn't created a new token to support Bitcoin adoption efforts – so why would a CAR?
To compare the two countries' Bitcoin adoption strategies, both countries have declared Bitcoin as legal tender. From that moment on, they diverge. In El Salvador, foreigners were initially able to purchase residency with an investment of 3 BTC, although it was later abolished. In CAR, "e-residency can be obtained […] by locking fixed collateral SANGO coins in the amount of 6000$ for a period of 3 years". Plus, foreign investors can directly access the country's strategic resources through the use of a crypto token, Ly explained.
To expose itself to the rapid development of El Salvador without touching Bitcoin, the Central American country has destroyed the volcanic bonds. Bitcoin Vulcan or Bonds support the creation of "Bitcoin City" and are backed by the government. In contrast, Sango is a cryptocurrency built on a "Bitcoin-backed" blockchain.
The now defunct Luna Classic Token (LUNC) was the last time a token used Bitcoin as its treasury. The token crash wiped billions of dollars off the total crypto market cap and dented confidence in the industry.
Previous articleSwyftx to chop its 'Earn' program this week, citing murky regulations
Next articleBitcoin price nears 3-week high as trader says sub-7% CPI may see $19K
Price analysis 11/25: BTC, ETH, BNB, XRP, ADA, DOGE, MATIC, DOT, LTC, UNI
$16K Bitcoin dropping to $12K–$14K — Can this really happen? Watch The Market Report
DeFi ecosystem still haunted by FTX contagion: Finance Redefined
Green shoots? Institutional crypto funds see first inflows in 5 weeks
Ethereum co-founder responds to PoS critics amid upcoming Merge
DeFi, DAOs and NFTs: Crypto is redefining how charities raise funds