The World Bank has announced it will not support the Central African Republic’s Sango cryptocurrency hub and expressed concern about the country’s widespread Bitcoin adoption.
The World Bank has expressed concern about the Central African Republic (CAR) legalizing Bitcoin (BTC) and has stated that it will not support the recently announced “Sango” crypto hub.
As reported by CoinCu, the Central African Republic is about to launch the country’s first crypto investment center called “Sango.” This is the next move of the country’s authorities after officially accepting Bitcoin as legal currency last month.
Sango is described as the country’s first “Crypto Initiative” — a legal hub for crypto-related businesses encompassing economic policies including no corporate or income tax and the creation of a virtual and physical “Crypto Island.”
This investment hub includes plans to create a digital national bank, a crypto wallet, and infrastructure that will allow for payments of assets to be made in Bitcoin, according to an online presentation that the government broadcast on Facebook on Monday.
Another source confirmed that the World Bank would pour $35 million into CAR for the purpose of digitizing the public sector. However, a spokesperson for the organization has said that the recently approved funding is not related to any cryptocurrency initiatives and that the World Bank will not support Sango.
The above grant, announced on May 5, is solely for updating and digitizing the existing public financial management system, such as improving digital bank payments.
In the statement, The World Bank added that “it will be physically impossible” for the institution to fund the Sango project and expressed disapproval of the CAR’s adoption of Bitcoin:
“We have concerns regarding transparency as well as the potential implications for financial inclusion, the financial sector and public finance at large, in addition to environmental shortcomings.”
CAR’s Bitcoin adoption has also caught the ire of the governor of the Bank of Central African States (BEAC), Abbas Mahamat Tolli, who wrote a scathing letter to CAR Finance Minister Hervé Ndoba shortly after news of the adoption.
“It is important that the relevant regional institutions, such as the central bank and the banking authorities, are fully consulted and remain in the driver’s seat.”
The CFA franc, the country’s official fiat currency tied to the euro, is becoming increasingly unpopular. Meanwhile, crypto adoption rates in Africa have surged, according to a March research by crypto exchange KuCoin, with crypto transactions increasing by more than 2,500% by 2021.
It is not clear what the cryptocurrency adoption rate in the specific CAR is. The country has an Internet penetration rate of just over 7% of the total population, according to data from DataReportal January 2022, meaning that only about 350,000 people have access to the Internet every day.
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