banks recommend CDBCs

The initiative of Faustin-Archange Touadéra, the chairman of the CAR, to legalize Bitcoin (BTC) in his country, was not necessarily welcomed by the authorities of the BEAC (Banque des Etats de West Africa), who forced him to respond by issuing a press release promoting CDBCs.

In April 2022, the Central African Republic became the second country in the world to legalize the use of Bitcoin (BTC). An ambitious project, much remains to be done before adoption is truly effective for the entire population. In June, the country continued its approach, announcing the Sango project, which includes a “legal crypto hub” and a special economic zone in the metaverse.

The political and economic context

The Central African Republic is a member of the CEMAC (Economic and Monetary Community of Central Africa), which also includes Cameroon, Gabon, Chad, Equatorial Guinea and Congo-Brazzaville. The BEAC is the common central bank of all these states and manages the local currency, namely the CFA franc.

In this regard, they should be distinguished from the countries of the WAEMU (West African Economic and Monetary Union) zone, which include Senegal, Mali, Benin, Togo, Niger, Ivory Coast, Burkina Faso and Guinea-Bissau. These countries also have the CFA Franc as their currency, but beware, these are not the same currencies! These currencies are both managed by the Banque de France, are backed by the euro at the same fixed rate (1 euro = 655.956 CFA francs), but they are not compatible at all! The ISO code is also XAF for the CFA franc of Central Africa and XOF for that of West Africa.

And despite an identical CFA acronym, the meaning is also different: initially “French Colonies in Africa” ​​it is now “African Financial Community” for one and “Financial Cooperation in Africa” ​​for the other.

In short, a postcolonial and anachronistic residue that makes the independence of the states concerned largely illusory…

BEAC press release

As you can imagine, the Central African Republic’s approach is not intended to please the high financial authorities of the region. Like Mali, this country, which has been ravaged by civil wars for years, has preferred to approach Russia for security support. The adoption of Bitcoin has therefore made this country’s case worse in the eyes of the political powers that are still subordinate to France and the European Union.

Therefore, on July 20, the BEAC issued a press release to regain control. It notes the desire of the RCA to continue to respect the current bylaws and takes the opportunity to take the plunge: primarily to pave the way for a reflection on the regulation of crypto assets, which is not surprising since the regulatory activity is the raison d’être of these institutions. But the press release then clarifies the desire to start thinking about implementing a central bank digital currency. The BEAC has therefore benefited greatly from the pro-bitcoin approach initiated by the CAR to place its pawns and bring the antithesis of Satoshi Nakamoto’s view into the debate.

Like its neighbour, the Central Bank of Nigeria, the BEAC therefore wants CDBCs to be introduced more or less shortly and more or less universally. So it follows the global movement that we are witnessing in all central banks that aims to give more control to an oligarchy to the detriment of the people.

Get a summary of news in the world of cryptocurrencies by subscribing to our new daily and weekly newsletter service so you don’t miss out on the essential Coinstand!

Claude Bernardini avatar

Claude Bernardini

Computer entrepreneur who has lived in African countries for fifteen years. In this uncertain and hesitant world, I see bitcoin and cryptos as one of the best opportunities in light of the challenges ahead.

Leave a Comment