Stablecoin issuer / redeemer in Central African Republic

Under CEMAC/BEAC regulations, a stablecoin pegged to the CFA franc must maintain strict 1:1 parity, and BEAC has adopted a specific sovereignty-driven policy that distinguishes such stablecoins from standard electronic money.

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.

Under CEMAC/BEAC Regulations: For electronic money, BEAC regulations are much stricter. E-money issuers are required to hold funds equivalent to the electronic money issued in a segregated account with a credit institution licensed in the CEMAC zone. These funds must be held in low-risk assets (typically fiat currency). This ensures 1:1 backing and liquidity.

Reference: Règlement N°02/18/CEMAC/UMAC/CM relatif à l’exercice de l’activité d’émission de monnaie électronique dans les États membres de la CEMAC (Regulation N°02/18/CEMAC/UMAC/CM relating to the exercise of electronic money issuance activity in CEMAC member states). Article 1 defines electronic money as "any monetary value representing a claim on the issuer, stored on an electronic medium, issued against the receipt of funds for the purpose of carrying out payment transactions, and accepted by a natural or legal person other than the issuer of electronic money."

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

Reference: Règlement N°02/18/CEMAC/UMAC/CM (Articles 5-13 detail the authorization process for e-money institutions).

Reference: Règlement N°02/18/CEMAC/UMAC/CM (Article 20).

Under CAR's Sango Act: Stablecoins would generally fall under the broad definition of "crypto-assets" or "virtual assets." The Sango Act defines crypto-assets as "any digital representation of value that can be digitally traded or transferred and used for payment or investment purposes." It does not create a specific classification for stablecoins (e.g., as distinct from other cryptocurrencies or as e-money).

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 CAR's Sango Act: The Sango Act, through its provisions for Virtual Asset Service Providers (VASPs), generally requires entities dealing with crypto-assets to safeguard client funds and hold sufficient reserves. While not explicitly detailed for stablecoins, Article 14 states that "any provider of virtual asset services is required to hold sufficient reserves to cover their liabilities to their customers." It does not specify the type of assets for these reserves (e.g., 1:1 fiat backing) or their location.

Legal Ambiguity: While CAR's Sango Act provides a national framework for "crypto-assets," it often lacks the granular detail expected for payment instruments like stablecoins.

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.

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.

Central African Republic: The CAR government's "Sango Project" initially envisioned a national digital currency ("Sango Coin") as part of its crypto hub ambition, distinct from a central bank digital currency (CBDC). However, the Sango project has faced significant challenges and is largely stalled. There are no concrete plans for a true CAR CBDC issued by a central monetary authority. The main interaction is the adoption of Bitcoin as legal tender, which complicates monetary policy but isn't a CBDC.

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

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.

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

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

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

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

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

Identification and Verification:

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).

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.