The World Bank has raised concerns about the Central African Republic’s ambition to establish a crypto hub, just weeks after the country became the second government to recognise Bitcoin as a legal tender.
President Faustin Archange Touadera tweeted last week that the government has established its crypto project, named “SANGO,” to guide the bitcoin agenda.
“The formal economy is no longer an option,” stated President Touadera after TANGO’s launch on Monday. “An impenetrable bureaucracy is keeping us stuck in systems that do not give a chance to be competitive.”
According to the SANGO website, the project was sanctioned by the national legislature and backed by both the CAR and the president. It aims to establish both a crypto-economic zone and a legal framework for cryptocurrencies by 2022.
Specifically, the plan cites a $35 million development fund for the digitalisation of the public sector authorised by the global bank on May 5. While the plan specifies that the world bank was not involved in the crypto endeavour, the international lender responded that the Central African Republic might use the granted funds to abandon its digital initiative.
The World Bank does not sponsor “Sango: The First Crypto Initiative Project”. The $35 million digital governance loan was unrelated to any crypto efforts. Instead, it aims to strengthen CAR’s public financial management system by supporting initiatives such as digitalising tax collection and salary payment systems.
The World Bank chastised the Central African Republic’s (CAR) government for downplaying the need to include critical financial institutions in its crypto strategy.
“It is important that relevant regional institutions, such as the central bank and banking authorities, are fully consulted and remain in the driving seat,” the World Bank said. “We have concerns regarding transparency, as well as potential implications for financial inclusion, the financial sector and public finances in general, in addition to environmental shortcomings.”
The answer showed the concerns of the Bank of Central African States, which had previously criticised the Central African Republic’s adoption of bitcoin, claiming a lack of openness and participation in the decision-making process. Prior discussions are necessary for revisions to monetary laws, a factor that might harm CAR’s financial inclusion by the regional bank. With an unfavourable position on incorporating cryptocurrencies into local monetary systems, the IMF is also perturbed by CAR’s action.
