CAR’s parliament passes law on tokenization of its resources

The National Assembly of the Central African Republic (CAR) recently passed a law on the tokenization of its natural resources, potentially creating channels for cryptocurrency-based foreign investments in the country.

The details

• The president of CAR’s National Assembly, Simplice Mathieu Sarandji, made the new development known on Monday, May 29.
• The new law for the tokenization of land and mineral resources, establishes a comprehensive framework for incorporating Bitcoin and Sango virtual currencies into the investment process.
• Investors can transfer abroad all annual profits they make from their investments, after having paid all necessary taxes and levies.
• The statement further added that non-citizens of the country can invest in mining, agricultural and forestry assets as well.

Be smart

• Tokenization transforms ownership of a real-world asset into a digital token. The token becomes a digital representation of the asset (gold, diamond, voting rights etc.)
• In the Central African Republic’s case, the Sango coin represents ownership of units of the country’s land, gold, uranium, iron, graphite, diamond and limestone resources.

Catch up

• Recall that CAR had, on April 27, 2022, announced the adoption of bitcoin as legal tender in the country, being the first country in Africa — and the only till date — to do so. Globally, the country was the second to make such a move.
• The following month, the country launched its native token, Sango, with which it hoped to tokenize access to its rich mineral resources and open it up to foreign investment.
• The country also announced that foreigners could purchase citizenship with $60,000 worth of Sango, a move that was ruled unconstitutional by the country’s topmost court.
• However, while the office of CAR’s president, Faustine-Archange Touadera, issued a statement that it would not contradict the court’s ruling and the country’s constitutional demands, it is unclear whether going ahead with tokenizing the country’s land and natural resources violates the court’s ruling.
• In any case, the Sango coin has so far witnessed minimal adoption with data on the project’s website showing over 269 million tokens still unsold.

Zoom out

• State-backed digital currencies appear to be gaining more ground in Africa.
• In April, Zimbabwe announced the launch of a digital currency pegged to the country’s abundant gold resources, per a Mariblock report.
• The currency was launched to provide an alternative store of value given the country’s hyperinflated and dollarized economy made worse by a devalued currency that has lost public trust.
• Several African countries are also considering launching central bank digital currencies (CBDC). Nigeria launched its eNaira in 2021, Ghana has piloted its own CBDC while other countries such as Tanzania, Kenya, Zambia and Morocco are creating legal frameworks to facilitate the creation of their respective CBDCs.