Custodial wallet / SaaS in Central African Republic

Law No. 22.006 of April 27, 2022, on the Regulation of Cryptocurrencies in the Central African Republic:

The 2022 law initially made Bitcoin legal tender in Central African Republic, but was later amended to revoke Bitcoin's legal tender status, while subsequent legislation enabled tokenization of land and natural resources.

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.

While it creates the framework, it generally defers to further decrees or existing AML/CFT laws for specific requirements.

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).

This regulation provides the comprehensive AML/CFT framework for financial institutions within the CEMAC zone. While it predates the explicit regulation of VASPs, the CAR's 2022 crypto law implies that VASPs should adhere to the same stringent AML/CFT requirements as traditional financial institutions, as per FATF Recommendation 15.

This regulation covers customer due diligence, suspicious transaction reporting, and record-keeping obligations for all regulated entities.

Law No. 00-010 of May 8, 2000, on Money Laundering and Terrorist Financing:

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

This regulation is further complemented by an instructional circular from the Banking Commission of Central Africa (COBAC), which is the primary supervisor for financial institutions in CEMAC:

Instruction No. 001/GR/2023 of 31 January 2023 from COBAC on the practical implementation of certain provisions of Regulation No. 04/22/CM/UMAC/CM.

Regulation No. 04/22/CM/UMAC/CM came into effect upon its publication on 21 December 2022.

The COBAC Instruction No. 001/GR/2023, providing implementation guidance, was effective from 31 January 2023.

While national transposition into CAR-specific law might still be ongoing or subject to internal processes, the regional directive and COBAC's instruction mandate compliance from VASPs operating in CAR as of these dates.

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

This threshold applies to both single transactions and linked transactions.

Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.

Collect and retain the following information for transactions above the threshold:

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.

Administrative sanctions: Fines, injunctions, public reprimands.

Withdrawal or suspension of operating licenses for VASPs.

Referral to national judicial authorities for criminal prosecution under national AML/CFT laws, which can lead to imprisonment and substantial monetary fines for individuals and legal entities.

Regulator Name: Bank of Central African States (BEAC), the regional central bank for the six-nation Economic and Monetary Community of Central Africa (CEMAC), which includes CAR.

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

The Central African Republic faces downside financing risks related to BEAC and has previously shown practices challenging regional monetary policy uniformity, suggesting potential for financial instability risks. While robust Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) legal frameworks were noted in 2006, the provided evidence does not directly confirm that BEAC specifically argued a CAR law violated CEMAC conventions concerning unified monetary policy.

Outcome: CAR did not repeal its Bitcoin legal tender law, leading to a standoff with BEAC. However, the practical implementation of Bitcoin as legal tender has been largely ineffective, partly due to the lack of infrastructure and the regulatory friction with BEAC. BEAC continued to advise against the use of cryptocurrencies in the CEMAC zone.

Regulator Name: International Monetary Fund (IMF) – acting in an advisory and surveillance capacity, not a direct enforcement role but exerting significant policy pressure.

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.

Outcome: The Sango Coin project faced significant delays, lack of widespread adoption, and a de-facto scaling back of its ambitious initial vision. While CAR did not abandon its crypto plans, the IMF's warnings contributed to the project's difficulties in attracting investment and achieving its goals. The project appears largely dormant or significantly scaled back in 2024.