Focusing the entire vision of Sango around Bitcoin is not just a buzzword, and adopting Bitcoin as legal tender was only the first step.

Sango’s innovative Bitcoin (BTC) layer-2 (L2) solution is what powers the new digital monetary system in the Central African Republic, representing a big step forward in the evolution of digital currencies worldwide.

Bitcoin L2 is just fancy crypto terminology for a second layer built on top of the foundation of the BTC blockchain. Referring to the Sango blockchain as the second layer, it is essentially a sidechain that profits from all the best parts that Bitcoin has to offer and also triumphs where it is deficient. Sango interacts fully with the entire Bitcoin network and transactions from Sango Coin (SANGO) to BTC are enabled by a two-way peg between the Bitcoin mainchain and the aforementioned Sango sidechain. Sango creates the ideal trustless system suitable for a nation-state, constructing a new economic infrastructure with integrated transparency.

Although the Lightning Network has the potential to become the leading Bitcoin layer-2 solution, it currently sustains a limited number of channels and has insufficient capacity for daily economic activity at scale.

Therefore, by implementing interoperability with Bitcoin, Sango enables financial inclusion for the citizens of the Central African Republic. The two-way peg would allow anyone to perform transactions with low cost, high capacity and fast confirmation times, while benefiting from e-governance (e-Gov) solutions, privacy and built-in programmability.

How exactly does it achieve this? Sango breaks it down even further: 

The Sango L2 solution aims to create a digital governmental infrastructure using blockchain technology. It also reduces congestion on the Bitcoin network, facilitating instant payments and cross-border remittances. Having Sango as a sidechain not only reduces the processing burden on the mainchain by distributing work on a second layer but also improves scalability while adding privacy and programmability via smart contracts. All of these, combined, make it an ideal solution for a national digital infrastructure able to power a new digital monetary system. 

Sango Coins will be issued by a quorum of nodes controlled by Central African Republic institutions, collectively known as the Institutional Quorum, with democratically elected members, including the presidency, ministers and National Assembly. The consensus engine is based on Tendermint Core but modified with a customized proof-of-convention (PoC). 

Why not simply use Bitcoin? 

Having Bitcoin on its own is not feasible for the Central African Republic, as it cannot meet all its requirements adequately. While many people request to see the Central African Republic relying solely on Bitcoin, it could not be achieved with current technology. 

Certain functionalities have to be specifically designed to meet the needs and requirements of governmental infrastructure, but governmental involvement is the factor that could enable widespread adoption. A technical solution like Sango, enhancing the Bitcoin blockchain, is the perfect way to achieve financial inclusion in the global payments ecosystem for the African population while driving the adoption for Bitcoin.

Complementary to Bitcoin, Sango also implements the use of smart contracts in order to enhance utility. It implements a robust infrastructure, enabling new use cases specific to extensive usage by the entire nation. 

It is evident that layer-2 solutions have the potential to revolutionize the blockchain landscape, and Sango is the first e-Gov Bitcoin Layer-2 solution.

Sango: The blockchain of Africa

Sango can summarize some of the most important benefits of this kind of technology in Africa and explain them in layman’s terms:

  1. Increasing transparency in key governmental activities: By building the governmental infrastructure on a blockchain, transparency is achieved.

  2. Banking the unbanked: The Central African Republic, as in much of Africa, has a population with no or limited access to financial services, including very basic ones. Sango will allow mobile-first financial services to be built on top of it.

  3. Connecting the Central African Republic and Africa with the world: By building a two-way peg with Bitcoin, Sango is allowing its users to connect with the entire world through Bitcoin.

  4. Tokenization of natural resources: Access to capital through tokenization of natural resources, with Africa being so rich, is one of the most important aspects. The Central African Republic is leading the way in the tokenization of natural resources.

  5. Build other digital currencies on top of Sango: central bank digital currencies and stablecoins are already a very important subject for Africa, and the Sango blockchain could be the blockchain to host them. The Bank of Central African States is considering launching a common digital currency for the CFA franc, and the blockchain used could be Sango, guaranteeing worldwide financial inclusion through Bitcoin.

Sango represents the Central African Republic’s vision for a digital future for it and all of Africa. Together with the Central African Backbone project set to finish in the fourth quarter of 2022, which means high-speed internet coverage for the entire country, plus the “Young People Initiative”, which distributes smartphones to the youth of the country, it will forever impact the lives of its citizens and change the future of the entire African continent.

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