Crypto-funded debit card in Central African Republic

Central African Republic has not established functional licensing or supervision of VASPs; rather, it has embraced opaque, unregulated cryptocurrency schemes that risk state asset capture by criminal organizations, with no effective AML/CFT compliance or VASP oversight.

BEAC Regulation No. 01/17/CEMAC/UMAC/CM of March 30, 2017, on the Prevention and Suppression of Money Laundering and Terrorist Financing in the CEMAC Zone:

As a member of the Economic and Monetary Community of Central Africa (CEMAC), CAR is bound by regional regulations issued by the Banque des États de l'Afrique Centrale (BEAC).

Obligation to Report: VASPs are obligated to report any suspicious transactions, regardless of the amount involved, to the national Financial Intelligence Unit (FIU).

Reporting Body: The national FIU in the Central African Republic is the Cellule Nationale de Traitement des Informations Financières (CENTIF).

Enhanced Due Diligence (EDD): Applying enhanced measures for higher-risk categories, such as politically exposed persons (PEPs), cross-border correspondent relationships, or transactions involving high-risk jurisdictions or products.

Ongoing Monitoring: Continuously monitoring the business relationship and transactions undertaken throughout the course of the relationship to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile.

Ultimate Beneficial Ownership (UBO): Identifying and taking reasonable measures to verify the identity of the beneficial owner(s) of customers, especially for legal persons and arrangements.

Tipping-off is strictly prohibited, meaning VASPs must not inform the customer or any third party that an STR has been filed.

Regulation No. 04/22/CM/UMAC/CM of 21 December 2022 concerning the regulation of Virtual Asset Service Providers (VASPs) in the CEMAC zone.

Exceeds EUR 1,000 (or its equivalent in XAF or other currency) for transactions conducted by VASPs.

Originator Information: Name, physical address, national identity number (or customer identification number), date and place of birth, and virtual asset wallet address (or unique transaction identifier).

Beneficiary Information: Name, physical address, virtual asset wallet address (or unique transaction identifier).

Transmit this information to the beneficiary VASP, where applicable, immediately and securely.

Maintain records of all collected information for at least five (5) years.

Implement risk-based procedures to identify and verify the identity of customers, especially for higher-risk transactions or relationships.

The Central African Republic's initial crypto framework was established by the Sango Act (Loi N° 22.007) in April 2022, which originally made Bitcoin legal tender, but that provision was later revoked, though subsequent legislation based on the framework enabled tokenization of land and natural resources.

Regional Framework (CEMAC/BEAC): Governed by the Banque des États de l'Afrique Centrale (BEAC), the common central bank for CEMAC member states, through its regulations on electronic money and payment services.

Conflict of Laws: The BEAC maintains that the CFA franc is the only legal tender and that its electronic money regulations apply to any digital asset used for payments in its jurisdiction. This directly conflicts with CAR's adoption of Bitcoin as legal tender and potentially with any stablecoin operations not explicitly licensed by BEAC.

Under CAR's Sango Act: Issuers of stablecoins, if classified as Virtual Asset Service Providers (VASPs) under the Sango Act, would be required to register and obtain a license from the National Agency for the Regulation of Cryptocurrencies (ANRC), established by Article 9 of the Sango Act. The ANRC is responsible for authorizing, supervising, and monitoring crypto-asset activities in CAR.

Under CEMAC/BEAC Regulations: Any entity issuing electronic money in the CEMAC region must obtain a specific license from the BEAC. This is a rigorous process involving capital requirements, governance standards, and operational controls. Operating without a BEAC license is strictly prohibited.

Reference: Règlement N°02/18/CEMAC/UMAC/CM (Articles 22, 23, 24).

Lack of Enforcement and Clarity: The practical implementation and enforcement of CAR's Sango Act, especially in light of BEAC's stance, remain largely untested and unclear. The ANRC's operational capacity and inter-agency coordination with BEAC are critical but largely undefined.

Entity Targeted: The Government of the Central African Republic (specifically its law adopting Bitcoin as legal tender).

Date: Immediately following CAR's adoption of Bitcoin as legal tender in April 2022. BEAC issued strong statements and a warning circular in May 2022.

Violation Type: Concerns over governance issues, transparency, economic risks, financial stability, and potential for illicit finance associated with the Sango Coin project and the adoption of Bitcoin as legal tender. The IMF repeatedly warned that these initiatives could undermine economic stability and complicate aid efforts. Penalty Amount: No direct monetary penalty or fine. The "penalty" was the withholding of financial support, conditionalities on aid, and strong public statements that could deter foreign investment and lead to a lack of international financial sector integration.

Lack of Specific Guidance: The most significant challenge is the almost complete absence of detailed tax regulations or official guidance from the CAR tax authorities (Direction Générale des Impôts - DGI) on how to practically implement the legal tender status of Bitcoin for all tax aspects, especially concerning non-Bitcoin cryptocurrencies.