- The Sango is supported by a comprehensive legal framework and is partially backed by Bitcoin
- With 210 million Sango available at launch, 13 million were snapped up by Friday 29th July
- The Central African Republic became the first African country and the only second in the entire world to make Bitcoin legal tender in April 2022
On the 25th of July, the Central African Republic launched its digital currency the Sango. The Central African Republic has once again proved a pioneer. It became the first African country and the only second in the entire world to make Bitcoin legal tender in April 2022.
The Sango is supported by a comprehensive legal framework and is partially backed by Bitcoin. With 210 million Sango available at launch, 13 million were snapped up by Friday 29th July. The Sango is backed by Bitcoin, meaning the Central African Republic will hold Bitcoin Reserves.
- The Sango will be Backed by Bitcoin
- Hybrid Token-gating another Sango feature
- Early figures suggest a slow uptake of the Sango token
The Central African Republic’s adoption of Bitcoin was controversial, with many detractors pointing out how poorly the move was thought out. The Bank of Central African States, CAR’s central bank, was caught by surprise as they had no knowledge of the adoption of Bitcoin by the nation.
The nation announced intentions to develop both the Sango and a Regulatory Framework to come in the third quarter of 2022. The Sango coin was launched on a Bitcoin-based Sango sidechain, which was built on existing Bitcoin infrastructure. This move is one of the factors that has allowed the CAR to launch the token expeditiously.
To purchase Sango tokens, buyers can use either Bitcoin (BTC), Ether (ETH), BNB Smart Chain (BSC), Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and Dai (DAI). Users will also be able to use wrapped Bitcoin (s-BTC in this case) on the Sango sidechain. This ensures interoperability between existing legal tender Bitcoin and the recently launched Sango. The token will also be backed by Bitcoin.
Backed by Bitcoin
The term “backed by Bitcoin” can mean many things. According to the Sango website, the Central African Republic will hold Bitcoin Reserves. However, a press release states that the backing will only be fractional rather than complete. The Sango website suggests a 20% fractional reserve.
The Sango website likens backing the Sango with Bitcoin to the now defunct gold standard for currency backing. This feature, plus the interoperability with Bitcoin, gives the Central African Republic a lot of confidence in the Sango.
Token gated features of the Sango
The Sango is an incredibly ambitious project that has more than just a crypto token built into it. The framework also includes features such as citizenship, residency and land ownership through a bonding program.
People can obtain CAR citizenship by bonding $60 000 worth of Sango tokens for five years. The tokens are inaccessible to the owner for the duration, but after five years, the Sango coins will be returned. The Sango website credits this as the first citizenship by investment program accessible through cryptocurrency. Citizens will enjoy no income tax on cryptocurrencies and an official passport.
The residency program will allow people to attain Central African Republic residency. The process is similar to that with Sango-based citizenship. However, with residency, you will only be required to bond $6 000 worth of Sango for three years and will still have it returned to you thereafter. The residency will open access to online company registration and other government services. This seems targeted at digital nomads.
Property ownership through the Sango token
The Central African Republic government aims to sell off some of its lands. It is the largest owner of land in the nation. Property can be acquired by bonding $10 000 of Sango tokens for ten years. As with other programs, the tokens will be returned to the owner at the maturity of the period. The land sold will be in the planned Crypto City in the Capital Bangui. The land will also enjoy 1:1 representation in the metaverse.
Slow uptake of the Sango?
Early numbers suggest a slow uptake of the Sango. 13 million tokens represent just 6.19% of the initial endowment of 201 million. The Central African Republic has many hurdles, including internet penetration and electricity access for its citizens. The chicken and egg conundrum that was presented when they adopted Bitcoin as legal tender has reared its head again.
Read: The fall of bitcoin adoption in the Central African Republic