What does “backed by Bitcoin” really means?
Let’s set things straight: SANGO, the coin of the Sango sidechain, will be fractionally backed by Bitcoin, which in simple terms means that the Central African Republic Treasury will consist of a Bitcoin reserve fund.
As you might know, the 70s had brought the depegging of the US Dollar from gold, causing an infinite supply of money to be potentially printed if needed. Nevertheless, inflation had become a common problem plaguing traditional Fiat currencies. On the other hand, Bitcoin represents a decentralized currency, which is not bound to any central authority. Thus Bitcoin is the optimal solution for a digital store of value, allowing citizens to democratize money and currency.
Also backed by Bitcoin means that it will build on the strong technical foundation and the most secure and decentralized cryptocurrency network in the world.
Through its established reputation, secure blockchain, and public, unalterable ledger, a strong foundation is set for the Central African Republic in improving the lives of its citizens by enabling access to financial amenities and ensuring a fair and transparent distribution of wealth. In spite of how some people have seen the initiative, Sango will allow citizens to enjoy a modern and digital monetary system, with unbanked citizens gaining access to the global financial system.
Backed by the Central African Republic Government
According to President Faustin-Archange Touadéra in the Sango Genesis event, “the Sango Coin will be the currency for the next generation”. This implied sense of confidence and assurance is an immediate result of its ‘backed by Bitcoin’ element, which creates confidence and reliability within the initiative. If having the support of the President and Government was not sufficient, building on the foundation of Bitcoin offers endless benefits, mostly because of its decentralized nature and limited supply. These benefits include, partial decentralization and no risks of de-pegs, differentiating SANGO from stablecoins and CBDCs and ensuring that current monetary problems will be surpassed.
It’s also been inferred that the population will have the most to gain with Bitcoin as the digital store of value behind SANGO. Citizens will be endowed with democratic control over the new digital monetary system, needing nothing more than a smartphone to make instant payments and receive money securely, finally removing the need of a traditional banking sector. There is already a wider vision behind SANGO, as the President puts it: “a common cryptocurrency and an integrated capital market that could stimulate commerce and sustain growth”.
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