One of the World’s Poorest Countries Put Its Faith in Crypto – Why?

Long before she became the head of Italy’s most far-right government since World War II, Giorgia Meloni railed against what she called France’s “colonial currency.”

In a 2019 clip from Italian TV that went mega viral last month, Meloni accused France of using the CFA franc to exploit the resources of 14 African countries, and exert financial dominance over them. A lot of what she claimed in the video is not true, but the CFA franc is controversial. 

The CFA franc was created in 1945 to be the currency of the “French Colonies of Africa,” and with France controlling printing and circulation, the French government effectively still has financial control over almost one million square miles of African land and more than 180 million people. While French officials used to refer to the currency as “an act of generosity to the colonies,” its use is now being fiercely debated.

Some of the African nations have fought against the currency, with riots taking place across the continent, involving citizens smashing up France-linked shops and denouncing the French language being taught in schools.

One of those 14 African countries that still uses the CFA franc is the Central African Republic, a landlocked state home to around 5 million people that’s one of the poorest countries in the world. 

But while other nations talk about ditching the CFA franc, CAR is one of the first to really do something about it, and earlier this year it became the first country in Africa and only the second in the world to adopt Bitcoin as legal currency.

“The alternative to cash is cryptocurrency,” said President Faustin-Archange Touadera. “For us, the formal economy is no longer an option.” 

In CAR only 14 percent of the population have access to electricity, and even less – around 10 percent – are able to use the internet. An ongoing conflict has also been negatively impacting the country and its economy for a decade. 

At the Bitcoin launch event, the CAR government said adopting the currency would change the country’s fortunes and put CAR “on the map of the world’s boldest and most visionary countries.” 

Bitcoin isn’t controlled by any power, it is technically universally available, and it cannot be censored – which is a massive change from the nation’s other currency, but it would take the average CAR citizen 60 years to buy a single coin. 

In Bangui – the capital of CAR – students at the University of Bangui have told VICE World News that “nothing has changed” since the government’s big announcement. 

The students wanted to remain anonymous because they were afraid of speaking negatively about the government’s ambitions. The right to freedom of expression does not exist in CAR, and citizens frequently experience intimidation and violence at the hands of pro-government militias, armed groups and national security forces. 

“There was a huge celebration when the Bitcoin plan was announced and we were all proud of our country,” one 20-year-old said, “but I don’t think life here has improved at all since then.” 

Another student added: “There are no price signs in Bitcoin asking people to pay using the new currency. Most market traders and customers don’t have a phone or the internet. Especially people outside Bangui, they have nothing.”

Alex Lielacher, founder & CEO of Rise Up Media – a marketing agency that works with Bitcoin startups – has been working full-time in Bitcoin since 2016. He agreed with the students, telling VICE World News how “surprised” he was that the country made the move in the first place.

“The Central African Republic is not exactly a leader in tech on the continent, and there never seemed to be much of a Bitcoin community there that could have lobbied for such a move,” he said.

Asked whether CAR citizens should see the adoption of Bitcoin as a positive or negative thing, Lilacher responded “neither really, because I just can’t see adoption taking off any time soon. But having an alternative to the CFA and sending a signal to France that CAR wants to have more currency independence is a positive in my eyes.”

He added: “However, that can also come with repercussions as there are powerful institutions like the International Monetary Fund, for example, which CAR has to deal with, that are not happy about countries adopting Bitcoin. So there could be challenges that the government will have to deal with.”

While people may have expected other nations to follow El Salvador, they certainly would not have thought that CAR would fit the bill. 

CAR’s main opposition party was against the proposal from the start. The Bank of Central African States also called the move “problematic” and noted that adopting a currency alongside the CFA could jeopardise the nation’s relationship with other African nations. 

Even with most people in CAR unable to invest in Bitcoin, and all of the warning messages, in July the CAR government pushed ahead and launched its own cryptocurrency – “Sangocoin”. Sango is the local language, which is spoken across the country. 

Sangocoin was labelled the future of CAR, and it required a $500 minimum investment. In return, investors could purchase land in the diamond-rich country for $10,000, and even buy CAR citizenship for around $60,000 – although these offers were later blocked by the country’s top court. Sangocoin investors are also currently “locked in” to their coin purchases, with no way to sell or exchange them. 

It was a bold move from the government, but it doesn’t seem to have paid off just yet. 

This month, the Central African Republic said it’s delaying listing its national cryptocurrency token on as-yet unspecified crypto exchanges – which would have made it easier to trade internationally. Reuters says the government has blamed “current market conditions” and “marketing reasons”, but the news agency has calculated that Sangocoin has only hit “0.01%” of the government’s most recent sale target. 

Another Sangocoin sceptic is Alex Gladstein, chief strategy officer of the Human Rights Foundation. He has been a longtime advocate of adopting Bitcoin in the developing world as well as a critic of the CFA franc – but even he feels like CAR’s scheme was “extremely half-baked”. 

“So while I am very sympathetic to a vulnerable and poor nation adopting Bitcoin as a second currency – especially a nation that has been controlled financially by its former colonial power for decades and decades, I am not very optimistic about how the execution has unfolded,” he told VICE World News. 

He added: “It really appears that this whole thing was like a scam to get Sangocoin promoted. I don't think the goal was to integrate Bitcoin in a meaningful way in the country's economy. It seems like the president is interested in Bitcoin and there's a small group of people around him who exploited that interest to be able to pass these laws to try and get the Sangocoin going, which they had a vision to make a ton of money off of. But it appears that it really only managed to raise a little bit of money in the end.”

Gladstein did concede that Bitcoin could be “a very important financial technology for the people of the Central African Republic over time, and it's smart for the government to explore how this can help people,” but there is a lot of work required to get there first. 

The Central African Republic government and the opposition government did not respond to several requests for an interview. 

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