Bitcoin, Sango Coin and the Central African Republic

The Central African Republic quickly adopted Bitcoin and created Sango Coin. Why does Sango Coin exist?

CAR became the first African nation to legalise Bitcoin in spring 2022.

CAR followed El Salvador in recognising Bitcoin. Since allowing its citizens to use the pioneering cryptocurrency for daily purchases, El Salvador has seen rising tourism, a strong economy, and free PR.

El Salvador’s success would inspire the CAR, a poorer nation. Despite its natural resource wealth, the CAR suffers from economic mismanagement, low private and foreign investment, and systemic government issues.

It ranks lowest in the World Bank’s Human Development Index on the poorest continent. Worse, up to 85% of the country’s exports are held in French treasuries, and its currency, the CFA franc, favours French economic development. Thus, using Bitcoin, a neutral, open-source, and censorship-resistant currency, could empower the nation.

Like El Salvador, CAR would make Bitcoin “official money.” Bitcoin supporters worldwide applauded this decision. CAR President Faustin-Archange Touadéra, a mathematician and Bitcoin supporter on social media, appeared to support the adoption of the unique cryptocurrency. Nayib Bukele’s pro-Bitcoin tweets resemble him.

Despite formal visits by Bitcoin-only proponents like Galoy Money, the country started its own token project, dampening Bitcoin community support. The country surprised the crypto community by launching Sango, a crypto token, days after the Bitcoin law took effect. Bangui’s “crypto hub” would benefit 5 million people.

Cointelegraph interviewed Mamadou Moustapha Ly, the Central African technician who developed Sango Coin, in Senegal, West Africa. Ly runs Kete Cash, a fintech startup. Ly explained Sango, a “token, not a currency.” The country’s plans to legalise Bitcoin include Sango.

First, Ly noted that the Bitcoin-as-legal-tender law mandates adoption. No cryptocurrency or Sango Coin is mentioned. He contrasted Sango with Bitcoin: “The law states that Bitcoin is legal tender. This is our currency. […] Sango coin is a Central African Republic project.”

Sango Coin offers foreign investors citizenship by investment, a CAR passport, and governance advantages. Buying Sango is like buying residency without using fiat currencies.

Why? El Salvador did not create a new token to promote Bitcoin adoption, so why should the CAR?

Both countries legalised Bitcoin to compare their adoption strategies. They split then. Foreigners could buy residency in El Salvador with 3 BTC, but it was revoked. The CAR allows “e-residency […] by locking a fixed collateral of SANGO Coins in the amount of 6000$ for a period of 3 years.” Ly added that the crypto token lets foreign investors directly access strategic resources.

Volcano bonds gave El Salvador exposure to its rapid development without Bitcoin. Government-backed volcano or Bitcoin bonds support “Bitcoin City” development. Sango is a blockchain-based cryptocurrency “backed by Bitcoin.”

The last Bitcoin-based token was Luna Classic (LUNC). The token’s meltdown erased billions from the crypto market cap and eroded confidence. Why a token? Why build a vulnerable system? Why do so when the Bitcoin contingent wants to go Bitcoin-only?

Ly called Sango a “government project.” Sango Coin sales will buy Bitcoin, which can be used to buy development project materials, labour, and other costs.

Note the nation’s dire financial situation. The Heritage Foundation’s 2022 Index of Economic Freedom calls the country a “repressed” economy, but France pays civil servants and government salaries.

In the CAR, clean water, security, education, and internet connectivity are prioritised over Bitcoin adoption. With these motivations, the country needs investment fast.

Ly noted that the Central African Republic’s high external debt makes traditional financing difficult. Sango Coin may provide that funding. Sango’s quick liquidity may help attract much-needed foreign direct investment (FDI).