Interpreting the Road to Web3 Gold Mining in the Central African Republic

Understanding Web3 Gold Mining in Central African Republic

Author: Will Awang

In August 2023, the Sango team of the Central African Republic (CAR) National Digital Currency Project announced that the country’s legislative body has passed the “Tokenization Law,” which will remove legal barriers for future tokenization operations related to land and natural resources.

In April 2022, the Central African Republic became the second country (after El Salvador) to adopt Bitcoin as legal tender, and in July of the same year, the official Sango project was launched to support the “Crypto Initiative” initiated by the country’s parliament. Currently, the country has become one of the most crypto-friendly nations in underdeveloped regions.

This article will explore what the sovereign digital currency project, Sango, is doing through its whitepaper. Apart from the project itself, it will also examine why a less developed African country has such strong belief and conviction in Bitcoin and blockchain technology from a national perspective.

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(https://sango.org/)

National Digital Currency Project – Sango

The Sango project is an important initiative in the “Crypto Initiative” launched by the Central African Republic’s parliament and has received support from the President of the Republic. The Sango project represents the determination of the Central African Republic to build a blockchain-based digital economy. According to the Sango project’s roadmap, the future major milestones of the project include: (1) providing democratic and decentralized investment channels through tokenization of land and natural resources; (2) building crypto cities and crypto islands; (3) developing into an African crypto hub; (4) building the Sango App as a bridge for residents and cities; (5) supporting Bitcoin mining projects through sustainable energy.

(https://sango.org/#roadmapSection)

The Sango project is responsible for issuing the native token of the ecosystem, SANGO, with a total supply of 21 billion. This is a “national digital currency” launched by the Central African Republic in July 2022. It is reported that SANGO is deployed on the Bitcoin sidechain, which allows it to obtain full liquidity of Bitcoin.

As equity in the SANGO ecosystem, holders can obtain corresponding rights by providing different investment amounts and locking them as collateral, including obtaining citizenship rights (pledge for 5 years) by investing in SANGO tokens worth $60,000, obtaining residency rights (pledge for 3 years) by investing in SANGO tokens worth $6,000, and obtaining land rights (pledge for 10 years) by investing in SANGO tokens worth $10,000, etc.

(https://sango.org/#roadmapSection)

The first two rights are easy to understand, but the third right related to land property has not been unlocked yet, and there is no clear legal explanation provided. Currently, only the following information can be found on the official website:

The government of the Central African Republic is the largest landowner in the country and intends to sell part of the land ownership through tokenization. The sale is conducted by purchasing SANGO tokens with an investment value of $10,000 to obtain the right to a plot of land (to be returned after a 10-year pledge), etc. Each plot of land has an area of 250 square meters and is located in the residential area of Crypto City, which extends along the Ubangi River in the capital city of Bangui.

At the same time, the Sango team will develop a 1:1 synchronous Crypto City metaverse project, where investors can manage their properties. The Sango website shows that houses/land purchased by investors in the metaverse can also be obtained in reality, giving people a feeling of an online metaverse sales office.

 (https://sango.org/ConceptDeckSango.pdf)

Natural Resource Tokenization Act

On August 22, 2023, the Sango project team announced that the country’s legislative body has passed the “Tokenization Act.” The “Tokenization Act” clears obstacles for the tokenization of real-world assets such as land, agriculture, and natural resources in the future. Other provisions of the act include making it possible to obtain business visas online and allowing citizens and foreigners to “easily” start businesses and obtain real estate, agricultural, natural resource extraction, and forestry licenses.

 (https://twitter.com/sangoproject/status/1693681573776826473)

Although what is currently seen on the Sango official website is only the investment promotion of the Central African Republic at the national level in the crypto world, and it is explicitly stated that SANGO tokens can provide national-level utility rights, the specific tokenization path for real-world assets such as land, agriculture, and natural resources needs further clarification and legal explanations.

However, regardless of the details, the tokenization of natural resources can indeed bring many conveniences to issuers and investors. This means that investors worldwide can easily use the Sango application to invest in these scarce natural resource assets through SANGO tokens. This will help the assets of the Central African Republic quickly obtain tokenized capital, present them on the blockchain in a transparent and democratic manner, and achieve broader investor participation through an open and fragmented approach.

This is the long-term goal of the Sango project, as it will make it easier for investors to invest in the Central African Republic and develop regions with abundant natural resources, eliminating complex processes at least at the cross-border investment legal level, such as approval of foreign investment, cross-border fund flows, investment country access thresholds, bilateral tax treaties, anti-monopoly reviews, establishment and governance of joint venture companies, and operations.

The Sango website shows that the Central African Republic is estimated to have iron ore worth $22 trillion, diamond mines worth $258 billion, gold mines worth $60 billion, graphite mines worth $7 billion, uranium mines worth $5 billion, and limestone mines worth $2 billion.

(https://sango.org/#roadmapSection)

Belief and Dedication to Bitcoin and Blockchain

By reading the whitepaper of the Sango project, one can see the positive desire of those underdeveloped regions in the world that we have overlooked to have a dialogue with the world. Instead of struggling and being dominated by the old systems, why not fully embrace Bitcoin and blockchain technology and head towards a bright future.

The Sango project whitepaper states: “Blockchain is considered one of the pillars of the fourth industrial revolution. Blockchain technology provides valuable opportunities for underdeveloped countries like the Central African Republic to establish an effective national digital currency system and achieve the same level of development as developed countries. For a country where the majority of the population does not have a bank account, reconfiguring the entire economic system through the framework of blockchain technology represents a leap forward in the Web3 revolution.”

Therefore, the Central African Republic will establish a complete legal framework that supports cryptocurrency and crypto-related activities at various levels, including (1) adopting Bitcoin as legal tender (or at least an anchor currency); (2) exempting all cryptocurrency-related activities from taxes; (3) enacting other relevant applicable laws.

After the passage of the “Tokenization Act,” the President of the Central African Republic stated in a press release, “The Central African Republic has made a significant strategic shift in blockchain, using innovative institutions to mobilize financial and fiscal resources to promote the development of local communities. This innovative tokenization legislative framework is the first of its kind in the world and will make the Central African Republic one of the most crypto-friendly countries in Africa.”

 (https://www.kitco.com/news/2023-08-24/Central-African-Republic-becomes-first-country-to-tokenize-land-and-natural-resources.html)

The Shackles of History

The Central African Republic is one of the least developed countries in the world, with agriculture as its main economic activity and a weak industrial base. Over 80% of industrial products are imported. Due to its location in a remote region south of the Sahara in Africa and various historical reasons (French colonization, armed coups, governance chaos, etc.), the Central African Republic has missed several previous industrial revolutions, causing people to overlook the untapped potential of this land. The same is true for most of Africa.

 (https://www.veryhungrynomads.com/visiting-central-african-republic/)

The future of the Central African Republic will be carried by the young generation, who must break free from the shackles of history in order to achieve national-level transformation. Therefore, the vision of the Central African Republic is to reform the entire economic system to adapt to young people and new technologies, and is seeking to establish a digital currency system based on blockchain technology and the “digital gold” of Bitcoin.

The Sango team expects that by 2030, the sub-Saharan Africa or the entire African continent has the potential for a leapfrog development, and the large number of young populations and untapped abundant natural resources are two very important pillars driving this leapfrog development. Of course, adopting appropriate technology is key to ensuring the achievement of this goal.

Bitcoin and blockchain technology have seen significant growth in Africa in recent years. Due to the lack of mature banks and financial systems in Africa, the peer-to-peer electronic cash payment system of Bitcoin has been effectively utilized in cross-border payments. In addition, African countries have high inflation rates, lack of application scenarios, and are subject to foreign exchange controls, which are cases where outdated systems have not yet been addressed/changed. Digital currencies may represent ready-made solutions for a better future.

In Tune with the World Once Again

We can see that underdeveloped countries, represented by the Central African Republic, are not satisfied with compromising with old systems and institutions in the creation of their monetary system or the construction of the digital economy. Instead of struggling and being dominated in the mud, why not fully embrace Bitcoin and blockchain technology and move towards a bright future.

Clearly, they do not intend to waste precious funds on early development of traditional finance, nor do they want to repeat the paths taken by the United States and China. Instead, they hope to leap directly into the Web3 era and seize the opportunity to develop in tune with the world once again.

From this, it can be seen that these countries have a genuine belief and conviction in Bitcoin and blockchain technology, despite the road being full of thorns.

 (Coindesk: Crypto Is Quietly Thriving in Sub-Saharan Africa: Chainalysis Report)

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