The Bank of Central African States (BEAC) is actively exploring the creation of a sovereign digital currency, aligned with the CFA franc, to limit the increasing influence of dollar-denominated stablecoins within the Economic and Monetary Community of Central Africa (CEMAC). This initiative aims to preserve the monetary sovereignty of the region in the face of the growing popularity of alternative digital assets.
BEAC Governor Yvon Sana Bangui emphasized this direction at an international conference in Dakar, specifying that the parity would be strict: one CFA franc will be equivalent to one digital CFA franc. This approach aims to maintain the central bank's control over the unit of account, issuance, and monetary liquidity, while offering an alternative to private stablecoins.
BEAC is collaborating with the International Monetary Fund (IMF) to establish a sub-regional regulatory framework for crypto-assets. In February, a skills transfer workshop was organized with the Banking Commission of Central Africa and the Financial Market Supervisory Commission to harmonize the regulation of crypto-assets in the CEMAC zone.
The rise of dollar stablecoins poses a particular challenge for CEMAC, which includes Cameroon, Gabon, Chad, Congo, Equatorial Guinea, and the Central African Republic. Increased use of these stablecoins could lead to capital flight and put pressure on the region's foreign exchange reserves, which were estimated at $11.3 billion at the end of 2024, equivalent to 4.2 months of imports. In addition, it could bypass the central bank's traditional mechanisms for managing liquidity and interest rates.
In comparison, Kenya has chosen to regulate virtual asset service providers through the Virtual Asset Service Providers Act, imposing high capital requirements and mandatory reserves for stablecoin issuers. Sierra Leone, on the other hand, is taking a cautious approach by evaluating a framework for authorizing stablecoins, given the fragility of its macroeconomic context.
In the West African Economic and Monetary Union (WAEMU), the adoption of crypto-assets, particularly Tether's USDT, is increasing and is used as a transitional asset in commercial transactions. Faced with this dilemma, African central banks must choose between prohibition, regulation, or a sovereign alternative.
The implementation of a digital CFA franc will require crucial decisions, including the publication of the sub-regional regulatory framework for crypto-assets in CEMAC and monitoring the Kenyan experience. The challenge is to determine who will control tomorrow's digital currency: the central bank or private players backed by major international currencies. BEAC has also launched an application to combat the counterfeiting of banknotes, a sign of its desire to maintain control over the fiduciary currency.
