Earlier this month, media reported that Tunisia had become the first country to issue a CBDC. Now that the central bank has denied the news, it’s time to take a closer look…
Earlier this month, many blockchain media outlets, including Cointelegraph itself as well as Decrypt, Beincrypto and LedgerInsight, reported that Tunisia had become the first country to digitize its national currency on a blockchain platform. But that news was incorrect. The story was originally was broken on Nov. 7 by two Russian state-owned news agencies, Tass and Iz.ru, which also highlighted that the Russian blockchain platform Universa was assisting the Central Bank of Tunisia, or BCT, in the task.
By Nov. 11, the BCT denied all claims regarding the development of a central bank digital currency. Specifically, the bank declared that although it is “working on finance digitalisation,” it does not have any kind of relationship with any domestic or foreign firm.
Alexander Borodich, the CEO of Universa, who was quoted in both original reports, claimed on Nov. 11 that the media misinterpreted the situation. However, Borodich had posted a link on Nov. 8 to one of the news stories on his Facebook page, and even said in an interview released on Nov. 10, saying that:
“So, we were able to launch — Tunisia launched, using our technology, the national digital currency.”
Overall, the startup actively participated in the news cycle, distributing the information through interviews and social media up to a day before the BCT’s statement.
Original (false) report: Tunisia launches a CBDC with Russian startup’s assistance
On Nov. 7, Tass and Iz.ru ran news articles with headlines that translate as “Russian developers will ensure the turnover of the electronic currency of Tunisia” and “Digital dinar: Tunisia launches electronic currency,” respectively.
The Tass report reads, “Tunisia has become the first country to announce the transfer of part of the country’s money supply to electronic form,” while Iz.ru alleges that Borodich said, “Tunisia’s digital money is not cryptocurrency, but a CBDC.” Both of them highlighted that Universa was handling the technical side of the project.
The CBDC — dubbed the “uDinar” by Universa Hub Africa, though similar projects have used the term “eDinar” — was set to be state-owned and backed by paper money, the reports claimed. Blockchain, in turn, would protect it against counterfeiting and make issuance cheaper and more transparent. The Tass article quoted Borodich as saying:
“Electronic banknotes cannot be faked — each such banknote, like the paper version, is protected by cryptography, it, like the paper counterpart, has its own digital watermarks. And the production of such a banknote is 100 times cheaper than spending ink, paper, electricity for the printing press.”
Additionally, the news pieces noted that Universa was set to receive a percentage of all transactions carried out with the uDinar, and the ledger would be visible to the country’s central bank.
On Nov. 12, Tunisia’s central bank issued its official announcement that refuted all claims regarding the development of the uDinar. The central bank clarified that it is currently exploring various methods of digital payment alternatives, including a possible CBDC, but has yet to proceed with its implementation. The bank further stated:
“The BCT is presently working on finance digitalisation, in its digital currency dimension and not the one involving crypto-currency. Its departments are considering the opportunities and risks inherent to these new technologies, notably as regards cyber security and financial stability.”
Notably, the BCT pointed to a possible cause of the misleading reports. The bank noted that the Forex Club of Tunisia featured talks regarding CBDCs. On Nov. 7, the club held an event that was hosted by an “an independent association from the BCT” — most likely the event’s tech partner, Universa Hub Africa. Cointelegraph did not receive a response from the Forex Club regarding the event.
According to the BTC’s statement, participants at this event attended a “technical feasibility demonstration of a digital currency theoretical solution,” initiated by an unnamed private startup that has “no moral or contractual relationship whatsover with the BCT,” the announcement elaborated, concluding:
“This Proof of concept was taken out of context, becoming thereby a marketing operation where the BCT’s name has been unduly used.”
The BCT didn’t respond to a request for comment for this story to confirm, among other topics, which startup participated in the said proof of concept.
Did Universa play along with fake news?
Once the news cycle started, when media reports alleging that Tunisia had become the first country to issue a CBDC surfaced, Universa itself began to circulate since-debunked reports, sharing links on its social media channels, including Twitter and Telegram.
Further, on Nov. 7, Cointelegraph received an email sent from a private Gmail address and signed by Mikhail Dremidov. Titled “URGENT: Tunisia issues state e-currency CBDC on Universa,” the letter contained a link to the above mentioned Iz.ru news piece.
As per LinkedIn, someone with the same name, Mikhail Dremidov, is listed as a PR manager at Universa. When Cointelegraph asked what company Dremidov was speaking for and why he would promote a news story that was later refuted by an official source, the email sender replied that “I represent myself.” He also referred to the press release written by Universa CEO Borodich that described the recent events in detail.
Borodich argued in the press release that on Nov. 7, Universa Hub Africa launched uDinar, backed by the Tunisian dinar, as a proof of concept and that “no question of CBDC émission related to uDinar was discussed at the Forex Club Tunisie Congress.”
He also confirmed that the BCT “has no contractual aspect on CBDC with Universa Hub Africa.” Finally, he claimed that “the misinterpretation in the articles that followed was not based on claims of Universa’s or BCT official representatives.”
When pressed about why he would refer Cointelegraph to a story that was proven false, Dremidov — who also admitted that he provides “part-time consulting services in PR” and referred to Borodich as “our CEO” as the discussion continued — said that he “was not in Tunisia and thought that the information in TASS was true.”
The articles were written wholly by Russian journalists who were present at the Forex Club Tunisie Congress, he added, while Universa’s official position could only be represented by their CEO — i.e., Borodich, who was speaking at the event. When asked to confirm the authenticity of Borodich’s quotes featured in both the Tass and Iz.ru stories, Dremidov replied:
“I can’t confirm the quotes because I was not in Tunisia and don’t understand French for my pity. I provide a part-time consulting services in PR, but I can confirm that the titles of articles (TASS and IZ.ru) are incorrect and that’s what made readers confused.”
Notably, while the conference was held mostly in French, Borodich delivered his presentation in English, as seen in the video recorded at the Forex Club Tunisie Congress.
Dremidov also said that Universa was trying to reach out to Tass and Iz.ru to update the pieces. “That’s hard because they are huge media giants,” he explained. Cointelegraph has also contacted Tass and Iz.ru to confirm the authenticity of their reports but has not received any responses.
Borodich provided similar answers upon a request from Cointelegraph. When asked how exactly he was contacted by Tass and Iz.ru’s reporters, and whether they explained to him that they were going to break news on Tunisia launching a CBDC based on Universa’s blockchain, the CEO replied:
“There was a press-conference, just after uDinar demo on stage. All articles have been written by reporters on their own and based on their editorial policy. They did not explain anything to me.”
He added: “We asked TASS and Iz.ru to update their articles via e-mail. As you know, TASS is the major state-owned media agency with lots of departments. It took time.”
Borodich evaded answering why Universa posted links to the original reports on its social media channels, contacted Cointelegraph via email implying that it was newsworthy material, posted one of those links on his private Facebook feed, and told an interviewer that “Tunisia launched, using our technology, the national digital currency.”
He did answer the following question, however: If you knew that IZ.ru and Tass had exaggerated the scope of Universa’s partnership with Tunisian officials, why would you continue to channel those statements? To that, the Universa CEO stated:
“It took time to clarify our points of view about definitions ‘u-dinar, e-dinar’ etc because of the weekend. It took time to translate everything either. The Congress was in french language. We have 10 years partnership with Tunisia and the last thing we wanted is something which my harm our previous achievements with digitalisation there. We do respect all our partners and behave accordingly.”
Further, according to a press release issued by the Forex Club Tunisie Congress, the event featured “a simple theoretical demonstration of a digital currency developed by a Tunisian fintech labelled Start-up Act.” It continued:
“Therefore, what has been reported by some press regarding the issuance by the Central Bank of Tunisia of a digital currency at this congress is unfounded.”
The press release then went on to outline that there was indeed a debate held regarding the possible issuance of CBDCs, where an expert from the International Monetary Fund outlined the possible risks of issuing such an asset.
Interestingly, the statement mentioned neither Universa Hub Africa nor the uDinar project, although they were indeed part of the conference, as seen on the video broadcast. The aforementioned IMF expert is Herve Tourpe clarified that the BCT has not yet launched a digital currency and later called the reports of a CBDC “fake news.”
An IMF representative speaking on behalf of Tourpe told Cointelegraph that he had no comment. The Tunisian Forex Club has not responded to Cointelegraph’s requests for comment, while Start-up Act told Cointelegraph that it is “not involved in this topic with BCT.”
Market reaction: “No dump”?
Universa’s token, UTNP, experienced a pump that lasted throughout the first news cycle and traded at almost $0.007 during its peak, according to data from Coin360. Once the BCT refuted the story, however, Universa’s price shed more than 50%. According to Dremidov, however, “there was no dump” but “two sales of $12k approximately.”
In Universa’s official Telegram group, some investors felt misinformed. “It wasn’t only the media that reported the news wrong, it was also Universa’s team that reported the news wrong,” a user nicknamed Uly55 wrote at the time. “It was posted here and on twitter that it’s a CBDC. But nothing, no explanation, no apology.” Another user nicknamed @BitJox argued: “The worst thing in this story is the reactions of the admins yesterday when people were congratulating them of the ‘Launch of the CBDC.’ Admins were not denying anything.”
Upon being contacted by Cointelegraph, Uly55 explained that he no longer felt like he was misled. “That post was done in the heat of the moment, before everything was cleared up,” the user said of his initial concern. “From my understanding it was the news who grabbed the wrong news and then it spread fast, too fast for Universa to handle it.”
BitJox, on the other hand, told Cointelegraph that this story made him stop buying more Universa tokens. When asked whether he felt like Universa mislead him, he replied: “They obviously did.” He then clarified that he didn’t know if it was intentional, although he’s inclined to say that it was:
“On the [Universa] telegram group, all users who haven’t been banned by the admins are talking about ‘deep state practices’ from the IMF.”
BiJox believes that this could be true, but thinks the head of Universa HUB Africa, Omar Bouattay, was speaking at the conference about Universa issuing the uDinar, not the government, which he believes would make it an ordinary coin and not a CBDC. He went on to add:
“So yeah, I think they totally lied by playing with words. They made us think CBDC is backed and managed by a central bank. But it’s actually issued by a private company.”
“The worst thing in this story,” according to Bitjox, is that while a private company unveiled its plans to issue the uDinar, there is no information about which company is going to audit that process:
“We don’t know if U-Dinar is really backed by actual paper money or by thin air.”
Tunisia and CBDCs: Previous reports and possible developments
The first reports on Tunisia experimenting with digital currencies date back to 2015, when Swiss software startup Monetas (whose CEO has since gained notoriety due to the Tezos scandal) announced the pilot launch of eDinar, a digital currency developed in partnership with Tunisia’s post office (La Poste Tunisienne) and local startup DigitUs. There have been no updates on the project since, and its website is currently offline.
Further, in April, media reports suggesting that Tunisia’s central bank was looking to issue a Bitcoin bond surfaced. Marouane el-Abassi, the governor of the country’s central bank, had reportedly announced in April this year that Tunisia had created a working group for this purpose.
He also added that Tunisia had launched the eDinar and had already been processing transactions through a native Poste Tunisienne system developed by DigitUs.
Meanwhile, the latest announcement from the BCT suggests that the central bank is open to ideas involving blockchain but prefers to go slow with the technology’s implementation and even more so with a digital currency.