The Central African Republic (CAR) is, as the name suggests, a country in the center of the African continent. Despite being a relatively poor country, the government made the decision apply crypto on the economy. The country wants to use “tokenization” for natural resources.
What is tokenization?
Tokenization is the process of converting an asset, such as stocks or commodities, into a digital token on a blockchain. These tokens represent a certain value and can be traded, bought or sold via the blockchain with all the benefits that come with it. Tokenization allows physical and intangible assets to be traded in a decentralized manner. This provides transparency, improved liquidity and faster transaction processing. It also allows fractional ownership, allowing users to own a portion of a more expensive asset.
Focus on blockchain
According to the African country’s government, tokenization of natural resources can attract companies to new investment opportunities. In addition, the innovation should also make it possible for domestic and foreign companies to apply for business licenses and electronic visas online.
The tokenization is part of a larger project called the Sango project. These include building a futuristic city and launching a new national digital currency called Sango Coin (SANGO) in July 2022. The goal of these moves is economic growth and renewal. Although the initiative offers opportunities, they also exist assure voiced by international bodies such as the World Bank on the country’s crypto-related decisions. Sango Coin is backed by Bitcoin (BTC) and operates on a separate sidechain network. However, this is not the case Central bank digital currency (CBDC).
False start Sango Coin
The first coin offering (ICO) by Sango Coin was disappointing to say the least. The government’s goal was to raise $20 million through the project in exchange for 200 million coins of $0.10 each. In the end, only 8 million coins were sold to the local people, worth just $800,000. What will become of the government’s ambitious plans remains to be seen.