Telegram’s TON In Talks With Three African Countries To Launch Stablecoins

Africa has been widely reported as having one of the highest crypto adoption rates globally. This trend could continue if new developments in Central Africa scale through the development phase to a successful launch.

The governments of Cameroon, the Democratic Republic of Congo (DRC) and the Republic of Congo (Congo-Brazzaville) have all announced intentions to adopt cryptocurrency and blockchain-based solutions to drive economic progress. The three countries recently published separate press releases in which they outlined their initial thoughts on cryptocurrency and how they plan to integrate it into their respective economies. The countries mentioned that they are in discussions with The Open Network (TON) to help lunch their first crypto initiatives.

According to a source close to the matter, the plan for each of the Central African countries is to launch localized stablecoins on the TON blockchain. The source emphasized that this isn’t a central bank digital currency (CBDC) project.

“We have different types of stable digital assets: you have CBDCs, which are mostly used for interbank settlements, and then you have consumer mass market stablecoins, like USDC and USDT, that are dollar-pegged,” said the source, who spoke on condition of anonymity. “But there’s this other hybrid approach, where stablecoins that are regionally applicable and regionally relevant exist; that’s kind of the approach that we are pursuing with DRC.”

Notably, the crypto adoption strategy in these countries isn’t central bank-led. Cameroon’s move is being driven by its Ministry of Posts and Telecommunications. In DRC, the Ministry of Digital Economy is in charge, and in the Republic of Congo, it is the Ministry of Posts, Telecommunications and Digital Economy.

“We’re not attempting to replace a national currency, and we’re not aiming to do a CBDC, which is obviously run by a central bank,” the source added. “A good way to think about a stablecoin in this context is kind of like Venmo or MPESA.”

It’s also worth noting that both Cameroon and the Republic of Congo are part of the Central African Economic and Monetary Community (CAEMC), a six-nation union that shares a common currency and central bank. CAEMC countries spend the Central African CFA franc, managed by the Bank of Central African States. Other CAEMC states include the Central African Republic, Chad, Equatorial Guinea and Gabon. The Democratic Republic of Congo spend the Congolese franc, issued by the Central Bank of the Congo.

The priority of Cameroon, DRC and the Republic of Congo is to adopt a blockchain network that is both inexpensive for transactions and relatively accessible, the source said. TON has an advantage here because of its focus on integration with Telegram and the distribution benefits it brings.

Early indications are that the government-led crypto adoption in the countries will involve integration with the Telegram messenger, making crypto-based peer-to-peer payments possible on the messaging app. This is similar to how WhatsApp allows residents in India and Brazil to send money using the messaging app. Although, WhatsApp’s P2P payments feature currently supports only fiat.

It’s unclear how these Central African countries’ crypto initiatives would affect or integrate with the existing mobile money structure.

According to a press release from TON, Minette Libom Li Likeng, the Minister of Posts and Telecommunications for Cameroon, said: “This marks a step-change in the economic destiny of Cameroon, as we look forward to a more digitally-enabled future economy. By collaborating with TON to develop a viable digital financial model for our nation, we are proudly leading the way in bringing access to modern financial instruments to all.”

In its release (translated from French using Google), the DRC said: “…Just like the internet, which was little known at the beginning but has now become common, it seems quite obvious that the world will evolve in the direction of greater consolidation of this type of currency. It is in our interest to reflect on the possibility for the country to develop this type of currency and to create a favorable legal and financial environment for its promotion.”

An expert from the Republic of Congo’s release (translated from French using Google) reads: “…we have reached an agreement with the representatives of TON, a blockchain originally designed by the founders of Telegram Messenger and now independent. Based on careful evaluation, TON’s technologies, products and stage of development provide us with the greatest potential to achieve our ambitions.”

By working with TON, Cameroon, DRC and the Republic of Congo now belong on a short list of countries building crypto solutions on a decentralized blockchain. That said, it remains unclear if the stablecoin products in the works would be interoperable with existing public cryptocurrencies.

On September 7, 2021, El Salvador became the first country globally to adopt bitcoin as legal tender. In October 2021, West African giant Nigeria launched the eNaira, becoming the first African country to launch a CBDC.