The World Bank has raised concerns about the Central African Republic's plan to create a crypto hub weeks after the country became the second country in the world to make Bitcoin legal tender.

The move comes after President Faustin-Archange Touadéra tweeted last week that the country had created its first cryptocurrency initiative, called Sango, to drive the bitcoin agenda.

“The formal economy is no longer an option,” President Touadéra said in a statement following the Sango launch on Monday. "An impenetrable bureaucracy keeps us stuck in systems that don't give us a chance to be competitive."

According to the Sango website, the initiative was approved by the National Assembly and supported by both CARas well as the President. The initiative aims to create a crypto-economic zone, as well as “creating a special legal framework for cryptocurrencies by the end of 2022.”

Most notably, the plan mentions a $35 million development fund approved by the World Bank on May 5 to digitize the public sector. While the plan specifically states that “the world bank is not part of the crypto initiative,” the global lender has responded to the suggestion that the CAR could use approved funds to preempt its crypto initiative.

“The World Bank does not support the Sango project as a first crypto initiative,” the lender said in an emailed response to Bloomberg, noting that the $35 million digital governance loan “is not associated with any crypto initiatives.” Instead, it was supposed to improve the CAR's public financial management by funding projects such as the digitization of tax collection and payroll systems.

The World Bank has also criticized the CAR government for downplaying the need to involve relevant financial institutions in its crypto plan.

“It is important that relevant regional institutions, such as the central bank and banking authorities, receive comprehensive advice,” the World Bank said. “We have concerns about transparency, as well as the potential impact on financial inclusion, the financial sector and public finance in general, in addition to environmental disadvantages.”

The response echoed the sentiments of the Bank of Central African States, which had previously denounced Bitcoin- the CAR movement, referring to the lack of transparency and involvement in the decision-making process. Monetary rules require prior consultation before making changes, which could adversely affect the financial availability of CAR by a regional bank. This step of the Central African Republic also caused discontent IMF, which has maintained a tough stance on the inclusion of cryptocurrencies in local monetary systems.

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