Sparks strike representation of cryptocurrency Bitcoin in this illustration taken November 24, 2024. REUTERS/Dado Ruvic/Illustration
Dec 17 (Reuters) - Central African Republic has embraced opaque cryptocurrency schemes that raise the risk of state assets being captured by foreign criminal organizations, according to a report published on Wednesday as the country gears up for an election.
President Faustin-Archange Touadéra is seeking a third term in office when the country, which has seendecades of coups, rebellions and unrest, goes to the polls on December 28.
He has emerged as a champion of cryptocurrency since taking office in 2016.In 2022, CAR became the first African country and the second nation in the world to adopt bitcoin as an official currency.
Touadéra has said the shift to digital currencies will deliver prosperity to citizens by raising funds from non-traditional sources to pay for infrastructure and other projects. Analysts widely expect him to win the election.
The Bangui government declined to comment on the report by the Global Initiative Against Transnational Organized Crime (GI-TOC), but a senior official speaking on condition of anonymity called it an effort to discredit it.
ALTERNATIVE TO BANKS' MONOPOLY, OFFICIAL SAYS
GI-TOC said in its report that the opaque nature of the schemes benefited a small circle of insiders and transnational criminal organizations looking for ways to launder money.
"The CAR regime is effectively trading away the country’s sovereignty at the expense of the wider population," said the report from the Switzerland-based network of some 600 experts tracking international organised crime.
The senior government official said on condition of anonymity: "These types of projects are now presented as alternatives to the monopoly of banks and the tightening of measures by financial institutions."
Among the poorest countries in the world, the nation of 5.5 million peoplehas experienced decades of conflict since gaining independence from France in 1960.
The GI-TOC report focused on two ventures that it says lack transparency and safeguards against money-laundering.
Touadéra billed the first venture, known as the Sango Coin project as a way to transform the capital, Bangui, into a futuristic city and improve national infrastructure, including by offering citizenship and e-residency and land to investors.
However, the proposed incentives were outlawed by the Constitutional Court in August 2022, soon after the venture was launched, and the project flopped, selling only 10% of its target 210 million tokens within a year, valued at less than 2 million euros, GI-TOC said.
The Sango Project said on X in April that it would not continue in its current form and "a new direction" wasplanned, without elaborating. The status of the funds invested in the scheme was unclear, GI-TOC said.
MEME COIN
In a second venture unveiled in February, Central African Republic launched $CAR, a meme coinmeant to raise its profile globally and support development. Meme coins are crypto tokens that are usually highly volatile, often featuring brands or trading on short-lived internet trends.
The debut was marred by setbacks, including the suspension of its internet domain within hours of its launch. Since then, the $CAR meme coin has been used to buy tokenized land, but there is no indication of how those sales have contributed to the national budget, GI-TOC said.
The GI-TOC report said the government's plan to extend the scheme to mineral concessions with virtually no identity verification or other money laundering safeguards could potentially auction off reserves of diamonds, gold and oil to transnational criminals.
(Reporting by Jessica Donati; Additional reporting by Pacome Pabandji in Bangui; Editing by Robbie Corey-Boulet and Alison Williams)
