Central African Republic

## Report: Retail Cryptocurrency Trading Status in the Central African Republic (CAR)

**Topic:** Retail_Trading_Status
**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

**1. Current Status:** `Unclear`

**2. Detailed Narrative Explanation:**

The status of retail cryptocurrency trading in the Central African Republic (CAR) is highly ambiguous due to conflicting national legislation, regional regulations, internal legal challenges, and practical realities.

*   **National Legislation (Initial Push):** In April 2022, CAR's parliament passed Law n°22.004, making Bitcoin legal tender alongside the existing CFA Franc [4, 27]. This law aimed to regulate all cryptocurrency transactions, requiring economic agents to accept crypto as payment and allowing taxes to be paid in crypto [3, 4, 32]. It also envisioned the creation of a National Agency for Regulating Electronic Transactions (ANTE) [3, 4]. This move made CAR the first country in Africa and the second globally (after El Salvador) to adopt Bitcoin as legal tender [27, 23].

*   **Sango Coin Project & Constitutional Court Ruling:** Following the legal tender law, the CAR government launched the "Sango Coin" project, a national cryptocurrency initiative [16]. This project included controversial plans to offer citizenship, e-residency, and land in exchange for investments in Sango Coin [10, 16, 22]. However, in August 2022, the CAR Constitutional Court ruled these specific provisions unconstitutional, stating that nationality has no market value and residency requires physical presence [3, 10, 12, 16, 22]. This ruling significantly undermined key aspects of the government's crypto initiative.

*   **Regional Opposition (BEAC/COBAC/CEMAC):** CAR is a member of the Central African Economic and Monetary Community (CEMAC) and uses the regional CFA Franc currency, managed by the Bank of Central African States (BEAC) and regulated by the Central African Banking Commission (COBAC) [2]. Both BEAC and COBAC strongly opposed CAR's 2022 crypto law, viewing it as inconsistent with CEMAC's monetary union agreements and statutes, and posing risks to regional financial stability [3, 6, 17, 18, 31].
    *   COBAC issued Decision D-2022/071 in May 2022, explicitly prohibiting institutions under its supervision (banks, microfinance, payment institutions) from engaging in any crypto-related transactions, including exchanging, converting, settling, or holding crypto-assets for themselves or third parties [3, 18, 23]. This effectively bans crypto within the formal banking system of the entire CEMAC region, including CAR.
    *   CEMAC Heads of State reaffirmed their commitment to the CFA Franc as the sole legal tender in the region in March 2023 [3].

*   **Legislative Reversal/Amendment:** Facing internal legal challenges and intense regional pressure, the CAR government introduced amendments to the 2022 crypto law in March 2023 [5, 6]. The amended law reportedly removed the legal tender status for Bitcoin and other cryptocurrencies, changing the requirement for economic agents to accept crypto to merely being "free to accept" it [6, 14, 20]. Provisions obligating the state to guarantee convertibility and allowing tax payments in crypto were also dropped [6]. Some sources state the CAR parliament repealed the legal tender status entirely [6, 8], while others suggest the law was adjusted to merely govern crypto transactions without the legal tender mandate [20].

*   **Current Regulatory Landscape:** Despite the initial law and its subsequent amendment, a comprehensive and functional regulatory framework for retail crypto trading, including KYC/AML rules specifically for crypto platforms or individual traders outside the formal banking sector, appears non-existent or incomplete [2, 3]. The regional financial market regulator (COSUMAF) introduced updated regulations in late 2022/early 2023 that define Virtual Asset Service Providers (VASPs) within CEMAC, potentially paving the way for future regulation, but this seems to conflict with the BEAC/COBAC ban [9, 19, 24, 26]. BEAC itself continues to express strong reservations about regulating cryptocurrencies, citing risks to foreign exchange reserves and monetary stability, although it is exploring a regional CBDC [15, 28].

**Conclusion:** While the initial 2022 law attempted to legalize and encourage retail crypto activity, including making Bitcoin legal tender, this was largely reversed or significantly weakened by the Constitutional Court ruling and subsequent legislative amendments in 2023. Crucially, the regional banking regulator (COBAC) maintains a ban on crypto activities within the formal financial sector it oversees. Although the amended national law might permit individuals to transact in crypto *if* both parties agree, the lack of a clear, functioning national regulatory framework, coupled with the explicit regional banking ban and ongoing opposition from BEAC, creates a state of legal and practical uncertainty. Retail trading might occur informally, but it operates in a legally ambiguous and unregulated grey area, facing significant hurdles regarding banking integration and conflicting directives from national and regional authorities. Therefore, the status is best described as `Unclear`.

**3. Relevant Text Excerpts:**

*   **(April 2022 Law):** "La présente loi a pour objet de régir toutes