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WAEMU Sovereign Bonds

0XOF reserves are backed by liquid WAEMU government bonds — sovereign debt issued by the 8-country West African monetary union.

What is WAEMU

The West African Economic and Monetary Union (WAEMU / UEMOA) is a monetary union of 8 countries sharing the CFA franc (XOF):

Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal, Togo.

The union is governed by the BCEAO (Central Bank of West African States), which manages monetary policy, issues currency, and regulates the financial sector.

The EUR peg

The XOF is pegged to the Euro at a fixed rate of 655.957 XOF = 1 EUR. This peg has been maintained since 1994 and is backed by an explicit convertibility guarantee from the French Treasury.

In practice, this means:

  • The BCEAO holds 50% of its foreign reserves at the French Treasury.
  • France guarantees unlimited convertibility of XOF to EUR.
  • The peg has held through multiple regional crises.

Why liquid WAEMU bonds

The protocol holds reserves in liquid (short-duration) WAEMU sovereign instruments — T-bills and short-term T-bonds traded on the BCEAO's regional market. This provides:

  • Sovereign backing — Debt obligations of 8 national governments.
  • French Treasury guarantee — The EUR peg and convertibility are explicitly guaranteed.
  • Regulated market — Bonds are issued through the BCEAO's regulated primary market.
  • Liquidity — Short-duration instruments can be unwound without significant price impact.
  • EUR-denominated risk — Because XOF is pegged to EUR, there is minimal currency risk for EUR-based holders.