Dec 17 (Reuters) – The Central African Republic (CAR) has ventured into unclear cryptocurrency initiatives that pose significant risks of state assets being appropriated by foreign criminal syndicates, as highlighted in a report released on Wednesday amidst the country’s preparations for an upcoming election. President Faustin-Archange Touadéra is aiming for a third term in the lead-up to the elections scheduled for December 28. Since assuming power in 2016, he has positioned himself as a proponent of cryptocurrency. In 2022, CAR made history by becoming the first African nation and the second country globally to recognize bitcoin as an official currency. Touadéra has argued that this transition to digital currencies will bring prosperity to the populace by generating funds from unconventional sources to finance infrastructure and other essential projects. Analysts largely anticipate his victory in the election.
### GOVERNMENT RESPONSE TO CRITICISM
The Bangui government chose not to respond to the findings from the Global Initiative Against Transnational Organized Crime (GI-TOC), but a high-ranking official, who requested anonymity, labeled the report as an attempt to undermine the government’s credibility. The GI-TOC report indicated that the opaque nature of these cryptocurrency schemes primarily benefits a limited group of insiders and international criminal organizations seeking avenues for money laundering. “The CAR government is effectively compromising the nation’s sovereignty at the expense of its citizens,” the report asserted, originating from a Switzerland-based network of approximately 600 experts monitoring global organized crime. The anonymous official defended the projects, stating, “These initiatives are now being positioned as alternatives to the traditional banking monopoly and the increasing regulations imposed by financial institutions.”
### A HISTORY OF CONFLICT AND POVERTY
As one of the world’s poorest nations, with a population of 5.5 million, CAR has endured decades of turmoil since gaining independence from France in 1960. The GI-TOC report concentrated on two specific projects that reportedly lack transparency and adequate measures to prevent money laundering. The first initiative, known as the Sango Coin project, was promoted by Touadéra as a means to transform the capital city, Bangui, into a modern urban center while enhancing national infrastructure. This included enticing investors with offers of citizenship, e-residency, and land. However, these incentives were deemed illegal by the Constitutional Court shortly after the project’s launch in August 2022, leading to its failure, as only 10% of the targeted 210 million tokens were sold within a year, generating revenue of less than 2 million euros, according to GI-TOC. The Sango Project announced on X in April that it would not proceed in its current form and planned to explore “a new direction,” but did not provide further details on the matter, leaving the status of invested funds uncertain.
### THE LAUNCH OF A MEME COIN
In February, CAR introduced $CAR, a meme coin designed to enhance its global visibility and support development efforts. Meme coins are crypto tokens known for their extreme price fluctuations and often draw inspiration from popular brands or fleeting internet trends. However, the launch faced complications, including the immediate suspension of its internet domain. Since its debut, the $CAR meme coin has been utilized for purchasing tokenized land, yet there is no evidence of how these transactions have impacted the national budget, as reported by GI-TOC. The report also raised alarms about the government’s intentions to broaden the initiative to include mineral concessions, which would lack sufficient identity verification and other anti-money laundering protections, potentially facilitating the auctioning of the nation’s reserves of diamonds, gold, and oil to international criminal entities.
