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The World Bank has expressed reservations about the Central African Republic's (CAR) adoption of Bitcoin (BTC) as a legal tender and has stated that it would not support the recently announced "Sango" crypto hub.

President Faustin-Archange Touadéra of the Central African Republic developed a regulatory framework for cryptocurrencies in the country and made Bitcoin legal tender at the end of April. On May 24, he announced plans to open "Sango," the country's first crypto center.

Sango is being billed as the country's first "Crypto Initiative," a legal hub for crypto-related firms that includes no corporation or income taxes and the establishment of a virtual and real "Crypto Island."

The government "got clearance for a $35 million development fund from The World Bank for the digitalization of the public sector," according to an official document explaining the Sango project.

The recently authorized funding, according to a spokeswoman for the institution, "is unconnected to any cryptocurrency project." "The World Bank does not support the 'Sango – The First Crypto Initiative Project," according to the report.

The World Bank announced a $35 million grant on May 5 to update and digitize the existing public financial management system, including enhancing digital bank payments.

The World Bank noted in the statement that funding the Sango project would be "physically impossible" for the organization, and that it disapproved of the CAR's acceptance of Bitcoin:

"We are concerned about transparency, as well as the possible consequences for financial inclusion, the banking industry, and public money in general, as well as environmental issues."

CAR's Bitcoin adoption has also enraged Abbas Mahamat Tolli, the governor of the Bank of Central African States (BEAC), who issued a critical letter to CAR Finance Minister Hervé Ndoba immediately after the adoption was announced.

Tolli noted in his letter that the proposed law "suggests that its major purpose is to establish a Central African currency outside of the BEAC's jurisdiction that might compete with or displace the legal currency," which he feels will "jeopardize monetary stability."

The World Bank expressed similar sentiments, stating:

"It's critical that key regional institutions such as the central bank and banking regulators be adequately consulted and stay in control."

The CFA franc, the country's official fiat currency tied to the euro, is becoming increasingly despised. Meanwhile, according to a March study from crypto exchange KuCoin, crypto adoption rates in Africa have surged, with crypto transactions increasing by over 2,500 percent in 2021.

It's unclear what percentage of CAR residents use cryptocurrency. According to statistics from DataReportal dated January 2022, the country's internet penetration rate is little over 7% of the entire population, implying that just approximately 350,000 people are online.

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