World Bank will not support Central African Republic’s crypto project

The World Bank has said it cannot support the Central African Republic’s upcoming crypto hub, ‘Sango’, due to the adoption of Bitcoin as a legal currency. 

The project was announced on May 24 by CAR President Faustin-Archange Touadéra, following months of working toward a crypto-friendly framework for the country. In late April, a regulatory structure for cryptocurrency was ushered in, and BTC was made legal tender.

Sango has been envisioned as an all-encompassing hub for the crypto industry – a place where business and innovation can thrive, free from corporate or income tax. The initiative that was kickstarted by the National Assembly is also reportedly set to include a physical “Crypto Island” in the heart of Africa and a digital wallet. 

According to Touadéra, Sango represents a “new economic era with enormous potential, which neither Africa nor the rest of the world have imagined”. 

So why is the World Bank taking issue with CAR’s plans? The answer lies with potential misused funds. 

An official outline of the upcoming crypto project claims that the Central African Republic “received approval for a $35 million development fund from The World Bank for the digitization of the public sector.” 

However, the grant was not intended for Sango, nor any other cryptocurrency initiative, but rather the management of existing public financial systems. Therefore it will be “physically impossible” for the bank to take part in the African nation’s crypto venture.

On top of this, the World Bank has expressed its concerns with the adoption of Bitcoin, due to questions of “transparency” and “potential implications for financial inclusion, the financial sector and public finance at large”. It also cited the environmental issues of the top cryptocurrency.

Whether the lender’s stance will impede CAR’s grand plans for its crypto hub is yet to be seen.