Financial Crime World

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Central African Republic’s Sango Project: A Comprehensive Plan for Economic Development

The Central African Republic (CAR) has unveiled a comprehensive plan for the Sango project, which includes the issuance of a national cryptocurrency called the Sango Coin. This document outlines several aspects of the Sango project and highlights its potential to promote economic development and growth in the country.

Key Features of the Sango Project

The CAR plans to leverage blockchain technology and cryptocurrency to tokenize its abundant natural resources, such as:

  • Gold: a valuable mineral with high demand
  • Diamonds: a luxury good with high value
  • Iron ore: a key component in steel production
  • Graphite: used in electronics and other industries
  • Uranium: a key component in nuclear energy
  • Limestone: used in construction and cement production
  • Copper: an essential mineral for electronic devices

These natural resources will be tokenized through the Sango platform, allowing for:

Tokenization of Natural Resources

The CAR plans to tokenize its abundant natural resources, such as gold, diamonds, iron ore, graphite, uranium, limestone, copper, and cobalt, through the Sango platform.

Real Estate Development

A “Crypto City” would be developed on the “Crypto Island” in Bangui, operated as a special economic zone. This will attract investors and promote economic growth in the country.

Institutional Setup

A “crypto hub” would be established to spearhead the country’s digitization projects, with oversight responsibilities through the Agence Nationale de Régulation de Transacti on Électronique (ANTE) and the creation of a digital national bank, Banque Nationale Digitale de la R épublique Centrafricaine (BNDRC).

Tax Advantages

Crypto transactions would be exempt from tax, with no income or corporate tax, and tax payments to be performed through Sango.

Crowdfunding Platform

Access to government infrastructure projects (public-private partnerships) would be available through Sango.

Complex Design Aspects of the Sango Coin

The document also highlights several design aspects of the Sango Coin that are complex and untested, including:

  • Unsettled Classification: The Sango Coin does not satisfy the standard definition of a Central Bank Digital Currency (CBDC), as it is not a digital liability of the central bank.
  • High Volatility: Due to its pegging mechanism with Bitcoin, the Sango Coin would inherit Bitcoin’s high volatility, making it a highly speculative asset.
  • Unclear Legal Treatment: The legal treatment of the Sango Coin is not clear from the crypto law, including whether it should be treated as debt or liability of the State.

Recommendations

To ensure the successful implementation of the Sango project and mitigate potential risks:

The CAR should clarify the legal treatment of the Sango Coin, including whether it is issued by the State or another entity.

Address Fiscal Risks

The CAR should address fiscal risks associated with the Sango Coin, including guarantees and contingent liabilities.

Develop Risk Management Strategies

The CAR should develop risk management strategies to mitigate the high volatility of the Sango Coin due to its pegging mechanism with Bitcoin.

By addressing these concerns and complexities, the CAR can ensure that the Sango project is implemented successfully and achieves its intended goals of promoting economic development and growth in the country.