Earlier today, the Constitutional Court of the Central African Republic (CAR) dictated it was unconstitutional to purchase citizenship, e-residency, and land with the government-backed cryptocurrency “Sango Coin.”
As per a Reuters report, the Court said the market’s volatility hindered the crypto project’s feasibility. The price of Sango Coin has been declining since November 2021, four months after its launch.
Sango Coin launched on July 21 of 2021. The move was a geopolitical surprise because the country had a weak economy, not much was known about the its intentions and the population was not really involved in the crypto ecosystem.
Central African Republic And Sango Coin
The “Sango” initiative was promoted by the President of the Central African Republic, Faustin-Archange, to attract Bitcoin (BTC) and cryptocurrency investors to the country, allowing them, among other advantages, to purchase land with cryptocurrencies without paying income tax.
According to the Sango Coin’s website, investors can purchase RCA citizenship for $60,000, which is held as collateral and returned after 5 years. The “e-residency” costs $6,000, which is returned after 3 years. The land costs US$10,000 per 250 square meters. All these amounts must be paid with the “Sango” cryptocurrency.
Currently, the SANGO cryptocurrency trades at around $0.10, which will be valid during the project’s first phase. It is expected to reach $0.45 during its final stage. Each SANGO token is fractionally backed by BTC, which was adopted by the country in April 2022.
Global Institutions Don’t Like Crypto
Organizations such as the International Monetary Fund criticized El Salvador for its decision to declare Bitcoin as a legal tender. The views towards the Central African Republic’s moves have received a similar response.
The President of CAR, however, has been firm in his pro-bitcoin stance and is confident that “in this new age, [Bitcoin as] digital gold will serve” as the engine of civilization as gold did for years.
Gold served as the engine of our civilization for ages! In this new age, digital gold will serve the same for the future! @SangoProject is the foundation that we will build on, together as one! Our President is speaking at the #Sango Genesis Event, at 7PM: https://t.co/pdfamwRkz2
— Faustin-Archange Touadéra (@FA_Touadera) July 3, 2022
As there are not many precedents for crypto-friendly countries (at least not in the same dimension as El Salvador or the Central African Republic), institutions can only speculate on the future of the intersection between crypto and politics. However, for the Central African Republic, this move represents new opportunities by facilitating the inflow of foreign currencies to enhance domestic trade.
It is worth mentioning that CAR’s main currency is the CFA franc, a currency used in 14 African countries that links African central banks to the French authorities, who have been accused of using this currency to enrich themselves by “impoverishing Africa.”