What happened?
In late December 2022, the Central African Republic announced a delay in the planned listing of its "national digital currency", Sango Coin, on a cryptocurrency exchange until the first quarter of 2023. Further listing delays are likely and we expect investment flows into Sango Coin to remain low.
Why does that matter?
Following the official launch of the Sango Coin project in July 2022, the government called the adoption of the cryptocurrency as legal tender (along with the CFA franc) "a decisive step towards opening up new opportunities for our country." However, given the significant physical barriers to the use of cryptocurrencies in the country (including low internet penetration, poor access to electricity, and limited use of mobile phones), combined with limited growth potential (compared to the stability offered by the CFA franc) and ongoing political uncertainty, we have long expected that businesses and consumers will not widely adopt cryptocurrencies. We continue to believe that the country's ability to attract investment through cryptocurrency is doubtful.
The government has yet to announce which cryptocurrency exchanges Sango Coin will launch on. The government cited โcurrent market conditionsโ as the reason for the planned listing delay, as many cryptocurrencies have lost significant value in recent months. The government launched Sango Coin with the stated goal of raising some US$1bn, but the project has faced significant operational difficulties. Investment inflows into Sango Coin have been very low, according to official data, well below the government's initial expectations.
Initially, the government planned a program to allow foreign investors to purchase US$60,000 worth of citizenship in Sango Coins, as well as provide incentives, such as tax breaks, for companies that invest in the extraction of raw materials through cryptocurrencies. However, the Constitutional Court ruled in September 2022 that the cryptocurrency could not be used to acquire a Central African passport or residence permit. Announcing the planned listing delay, the government also said that further updates on investment incentives would be made in the coming weeks.
Whats Next?
Further delays in the listing of Sango Coin on a cryptocurrency exchange are likely, given limited acceptance to date, significant barriers to widespread adoption, and low levels of political certainty. We continue to expect investment flows into Sango Coin to remain low.
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