The Bank of Central African States is favoring a sovereign digital currency pegged to the CFA franc, aiming to prevent dollar-backed stablecoins from undermining monetary sovereignty in the CEMAC region.
The Bank of Central African States (BEAC) is seeking to retain control over the future of digital payments in the CEMAC zone by backing a sovereign digital currency pegged one-to-one to the CFA franc, rather than allowing widespread adoption of dollar-backed private stablecoins.
BEAC Governor Yvon Sana Bangui outlined that position on Friday in Dakar during an international conference on crypto-assets and digital innovation organized by the Central Bank of West African States (BCEAO).
“We will have only one parity: one CFA franc, one digital CFA franc, consistent with the existing monetary cooperation framework. This is a matter of monetary sovereignty for the CEMAC zone,” Bangui said during a governors’ roundtable.
The central bank is currently working with the International Monetary Fund to develop a sub-regional regulatory framework. In February, the BEAC also held a capacity-building workshop with the Central African Banking Commission (COBAC) and the Financial Market Supervisory Commission (COSUMAF) to prepare a harmonized crypto-asset regulatory framework across the region.
Containing digital dollarization
Bangui’s remarks come as stablecoins face tighter oversight globally. In the United States, the GENIUS Act has established a legal framework for payment stablecoins. In Europe, the Markets in Crypto-Assets (MiCA) regulation already governs issuers of asset-backed tokens, including those pegged to the euro and other currencies.
The issue carries particular significance for the CEMAC bloc, which includes Cameroon, Gabon, Chad, Congo, Equatorial Guinea and the Central African Republic. The six countries share the CFA franc, whose convertibility is guaranteed under an agreement with the French Treasury.
Within that framework, widespread use of dollar-backed stablecoins could effectively introduce a parallel currency into digital transactions.
That is the risk the BEAC is trying to contain. The use of dollar stablecoins by CEMAC residents would require hard currency to fund digital wallets, many of which are hosted outside the region. Such flows could increase pressure on foreign exchange reserves while bypassing the channels through which the central bank manages liquidity and interest rates.
At end-2024, CEMAC’s foreign exchange reserves stood at an estimated $11.3 billion, equivalent to 4.2 months of imports. That remains below the five-month threshold generally recommended by the IMF.
Against that backdrop, the rise of stablecoins extends far beyond technology. It directly affects external stability, banking liquidity and the central bank’s ability to maintain effective monetary policy.
Kenya chooses regulation over a sovereign alternative
At the same roundtable, Central Bank of Kenya Governor Kamau Thugge presented a different approach. Nairobi has chosen to regulate virtual asset service providers under the Virtual Asset Service Providers Act, with implementing regulations expected in the coming weeks.
According to Thugge, stablecoin issuers will face the highest capital requirements among virtual asset service providers. They will also be required to maintain one-to-one reserves, with at least 30% held as bank deposits and the remainder invested in high-quality liquid assets. The framework also grants stablecoin holders an on-demand redemption right.
Kenya’s approach is therefore to integrate stablecoins into a strict regulatory framework rather than compete with them through a sovereign digital currency. It reflects the trajectory of an economy where financial innovation, driven largely by mobile payments, is already deeply embedded in everyday transactions.
Sierra Leone is taking a more cautious approach. Bank of Sierra Leone Governor Ibrahim Stevens said the institution was assessing a stablecoin licensing framework with technical support from the IMF.
The caution reflects the country’s recent macroeconomic fragility. After inflation peaked at 54% in October 2023, Sierra Leone reduced price growth to below 5% in April 2025. Authorities now want to avoid new digital instruments introducing risks to a stabilization effort that remains fragile.
A trend already visible in West Africa
African central banks’ interest in stablecoins is no longer theoretical. In several economies, these instruments are already being used to store value, transfer funds and facilitate some cross-border transactions.
In the West African Economic and Monetary Union (WAEMU), crypto-asset adoption has accelerated in recent years, particularly among merchants involved in trade with China or Gulf countries. Tether’s USDT, pegged to the dollar, is sometimes used as a bridge asset between the purchase and resale of goods, helping traders reduce exposure to inflation and exchange-rate constraints.
The trend illustrates the dilemma now facing central banks: ban stablecoins, regulate them or offer a sovereign alternative.
The IMF has generally favored regulation over outright prohibition, a position the BEAC says it is incorporating into its accelerated reform agenda.
A sovereign response still taking shape
The approach defended by Bangui is built around a simple objective: meet growing demand for digital assets without surrendering control over currency issuance to private actors.
A digital CFA franc pegged one-to-one to the existing currency would allow the BEAC to retain control over the unit of account, issuance and liquidity while offering an alternative to private stablecoins.
Implementation, however, will be critical. The BEAC has been studying the possibility of a central bank digital currency for several years, and the regulatory work remains ongoing. Attention will now turn to the publication of the CEMAC sub-regional crypto-asset regulatory framework, expected later this year, as well as to the rollout of Kenya’s implementing regulations, which other African central banks are monitoring closely.
For Central Africa, the issue is no longer simply whether to regulate stablecoins. It is increasingly about determining who will control the digital currencies used in future transactions: central banks or private issuers backed by major international currencies.
Idriss Linge