Dec 17 (Reuters) – The Central African Republic (CAR) is venturing into obscure cryptocurrency initiatives that pose significant risks of state assets falling into the hands of international criminal syndicates, according to a report released on Wednesday, coinciding with the nation’s upcoming elections. President Faustin-Archange Touadéra is vying for a third term as the country, which has endured years of coups and civil strife, prepares to vote on December 28. Since his election in 2016, Touadéra has emerged as a proponent of cryptocurrency, and in 2022, CAR made history by becoming the first African nation and the second globally to recognize bitcoin as legal tender. He advocates that this transition to digital currency will enhance the lives of citizens by tapping into unconventional funding sources for infrastructure and development projects. Analysts largely predict his victory in the upcoming election. While the Bangui administration refrained from commenting on the findings of the Global Initiative Against Transnational Organized Crime (GI-TOC) report, a senior official, who requested anonymity, dismissed the allegations as an attempt to undermine the government.
### ALTERNATIVE TO BANKS’ MONOPOLY, OFFICIAL SAYS
The GI-TOC report highlighted that these opaque cryptocurrency initiatives primarily benefit a select group of insiders and international criminal organizations seeking avenues for money laundering. The report, compiled by a Switzerland-based network of approximately 600 experts specializing in global organized crime, stated, “The CAR regime is effectively trading away the country’s sovereignty at the expense of the wider population.” The anonymous government official defended these projects as alternatives to traditional banking monopolies and increasing restrictions imposed by financial institutions.
### A NATION WITH A TURBULENT HISTORY
Recognized as one of the poorest nations globally, the Central African Republic, home to 5.5 million residents, has faced decades of turmoil since gaining independence from France in 1960. The GI-TOC report scrutinized two specific projects, claiming they lacked transparency and adequate safeguards against money laundering. The first initiative, the Sango Coin project, was touted by Touadéra as a means to transform Bangui into a modern city and enhance national infrastructure. This included offering citizenship, e-residency, and land to investors. However, these proposed incentives were ruled illegal by the Constitutional Court in August 2022 shortly after the project’s launch, leading to its failure, with only 10% of the targeted 210 million tokens sold within the first year, amounting to less than 2 million euros, according to the GI-TOC.
### A SHIFT IN STRATEGY
The Sango Project announced on X in April that it would not proceed in its original format and hinted at pursuing “a new direction,” though details were not provided. The report noted that the status of the invested funds in this venture remained unclear.
### MEME COIN INITIATIVE
In another initiative introduced in February, the Central African Republic launched $CAR, a meme coin aimed at enhancing its global profile and fostering development. Meme coins are cryptocurrency tokens characterized by high volatility, often linked to popular internet trends or brands. The launch faced immediate challenges, including the suspension of its internet domain just hours after going live. Since then, the $CAR meme coin has reportedly been utilized for purchasing tokenized land; however, there is no evidence indicating how these transactions have impacted the national budget, according to the GI-TOC. The report also cautioned that the government’s plan to expand the initiative to include mineral concessions, with minimal identity verification and inadequate anti-money laundering measures, could potentially expose the country’s diamond, gold, and oil reserves to transnational criminal organizations.
