Chazai Wamba An Independent Law Firm based in Douala - Cameroon




COBAC Decision D-2022/071 on the holding, use, exchange and conversion of crypto-currencies or crypto-assets by institutions subject to COBAC

17 May 2022

On 6 May 2022, the Central African Banking Commission (the « COBAC » or the « Commission« ) met in extraordinary session under the chairmanship of Mr. Abbas Mahamat TOLLI, President of the COBAC, and therefore Governor of the Bank of Central African States (the « BEAC » or the « Central Bank« ).

During this session, which took place by videoconference, as we learn from the press release of the meeting, it was a question, firstly, of specifying the legal regime of crypto-currencies in the Economic and Monetary Community of Central Africa (the « CEMAC« ), and secondly, of taking measures aimed at guaranteeing the stability of the banking and financial system of the CEMAC.

At the outset, the Commission defined crypto-currency as a digital asset that uses a computer network and relies on a technology for exchanging and storing data peer-to-peer between computers, using a shared ledger that tracks all transactions. This technology is called blockchain.

After stressing the significant risks associated with, among other things, money laundering, terrorist financing and tax evasion, which arise from the holding and use of crypto-currencies, and without failing to point out that crypto-currencies do not fall into any category of legal means of payment in the CEMAC zone, COBAC emphasised the fact that keeping accounts in a crypto-currency or any virtual currency would be a breach of COBAC Regulations R-98/01 and EMF-2010/01 which set out « the keeping of accounts [… ] in Franc for Financial Cooperation in Africa (CFAF or XAF) ».

In light of the legal regime developed above, the Commission has taken a number of measures.

Firstly, it prohibited the institutions subject to it and their technical partners from subscribing to or holding crypto-currencies or virtual currencies, regardless of their nature, but also from settling or hedging transactions involving the above-mentioned currencies in foreign currency or CFAF.

Secondly, the COBAC has established the CFAF as the only currency accepted for the keeping of the accounts of the institutions under its supervision.

Finally, the said establishments, which are henceforth required to take all the necessary precautions so that the operations carried out or rejected in connection with crypto-currencies do not escape their vigilance, are furthermore required to list them, and to communicate a detailed statement to the Commission and the Central Bank every month.

With these words, the Commission issued its decision, followed by a press release that only outlined the main point.