The statement “Sovereignty Begins with Currency, AES Will Exit CFA Franc,” attributed to Niger’s Foreign Minister, reflects a growing sentiment among some West African nations, particularly those in the Alliance of Sahel States (AES)—Niger, Mali, and Burkina Faso. These countries, all under military leadership following recent coups, have expressed intentions to distance themselves from the CFA franc, a currency tied to the euro and historically linked to French colonial influence. The AES views the CFA franc as a barrier to full independence, arguing that true sovereignty requires control over their own monetary system.

The CFA franc, used by eight West African countries in the West African Economic and Monetary Union (UEMOA) and six in Central Africa, has long been a point of contention. Critics argue its peg to the euro and past requirements to deposit reserves with the French Treasury limit economic autonomy, keeping these nations tethered to France. Proponents, however, highlight its role in providing stability and low inflation in a volatile region. The AES countries, having already withdrawn from the Economic Community of West African States (ECOWAS) in January 2024, see exiting the CFA franc as a logical next step in asserting sovereignty.

While the Nigerien Foreign Minister’s statement signals intent, no concrete timeline or detailed plan for a new currency has been universally confirmed across the AES. In late 2023, the finance ministers of Niger, Mali, and Burkina Faso discussed forming a monetary union, and Niger’s junta leader, Abdourahamane Tiani, has echoed the need for a currency shift. However, Mali’s finance minister in early 2024 noted the country’s continued UEMOA membership, suggesting uneven commitment within the AES. Economists warn that abandoning the CFA franc poses significant risks—such as managing existing CFA-denominated debt, ensuring convertibility, and maintaining economic stability—especially for agricultural economies with limited industrial bases.

The push reflects broader anti-French sentiment and a desire for self-determination, but the practical challenges are steep. A new AES currency would require robust institutions, coordinated policies, and likely years of preparation to avoid economic turbulence. For now, the statement is more a declaration of principle than a finalized policy, resonating with those who see the CFA franc as a colonial relic, yet leaving open questions about execution. Moving away from the CFA franc, which is pegged to the euro and backed by France, could destabilize the economies of Niger, Mali, and Burkina Faso. A new currency would lack the inherited credibility of the CFA, potentially leading to inflation, exchange rate volatility, and loss of investor confidence.

Much of the AES countries’ public and private debt is denominated in CFA francs. A new currency could complicate repayment, especially if it depreciates rapidly, increasing the real cost of servicing euro-linked obligations. The CFA franc facilitates trade within the UEMOA zone and with Europe due to its stability and convertibility. A new AES currency might weaken regional trade ties, particularly if neighboring countries remain on the CFA, creating exchange barriers. While a local currency offers control over monetary policy—potentially allowing AES states to print money or adjust interest rates to suit domestic needs—it sacrifices the stability provided by the CFA’s euro peg.

These nations, reliant on agriculture and raw material exports e.g., Niger’s uranium, may struggle to manage external shocks without a strong institutional framework. Designing, producing, and distributing a new currency, alongside building independent central banking systems, would demand significant resources—resources these countries, already strained by conflict and sanctions, may not have readily available. Exiting the CFA franc could bolster domestic support for AES military regimes by framing it as a rejection of colonial legacies, tapping into widespread anti-French sentiment. This could solidify their legitimacy amid political instability.

The move risks deepening divisions in West Africa. ECOWAS and UEMOA, already weakened by the AES exit from the former, could face further strain if a rival monetary bloc emerges, undermining decades of regional integration efforts. Not all stakeholders may support this shift. Urban elites, businesses tied to international trade, and populations accustomed to the CFA’s reliability might resist, creating internal tension or unrest. A successful exit would mark a significant blow to France’s economic and political leverage in the Sahel, accelerating its waning influence as AES states pivot toward partners like Russia, China, or Turkey, who have already increased military and economic engagement in the region.

The AES might seek technical and financial support for a new currency from non-Western powers. Russia, for instance, could offer backing as part of its broader strategy to counter Western influence in Africa, though its own economic constraints might limit this role. If the AES succeeds, it could inspire other CFA-using nations—like Senegal or Cote d’Ivoire—to reconsider their monetary arrangements, potentially destabilizing the broader CFA zone and prompting a wider reconfiguration of African economic alignments. Economic instability from a botched currency transition could exacerbate security challenges—such as insurgencies linked to Boko Haram or ISWAP—by straining budgets for military and social programs, especially if Western aid tied to ECOWAS or French partnerships dries up.

The AES’s ambition reflects a global trend of nations seeking greater autonomy in a multipolar world, but the practical hurdles are daunting. Ghana’s cedi and Nigeria’s naira, both independent currencies, have faced depreciation and inflation pressures, offering cautionary tales. Success hinges on the AES’s ability to coordinate policies, build trust in a new currency, and secure external backing—all while managing ongoing crises like jihadist insurgencies and food insecurity. Failure, conversely, could deepen poverty and isolation, making the statement’s bold vision a double-edged sword. For now, the implications tilt toward disruption, with the outcome depending on execution rather than intent alone.

Taiwan Semiconductor Manufacturing Co. (TSMC) could be fined more than $1 billion by the U.S. Department of Commerce following revelations that it unwittingly supplied a compute chiplet used in Huawei’s Ascend 910-series AI processor.

If the penalty is handed down, it will rank among the largest ever imposed under U.S. export control laws — a reflection not only of the volume of chips allegedly transferred but of Washington’s growing alarm over what it sees as systematic efforts by Chinese companies to bypass its sanctions regime.

Reuters, citing sources close to the matter, reported that the fine is being considered under U.S. rules that allow penalties of up to twice the value of any unauthorized transactions. While no formal charges have been filed against TSMC yet, the Commerce Department typically initiates such proceedings with a proposed charging letter that lays out the violations, financial estimates, and a deadline for response — usually within 30 days.

The alleged infraction involves a compute chiplet TSMC believed it was manufacturing for Sophgo, a relatively obscure Chinese firm with ties to cryptocurrency mining hardware company Bitmain. The chiplet was later discovered inside Huawei’s Ascend 910-series processor — an advanced AI chip that would normally require export licenses due to Huawei’s inclusion on the U.S. Entity List since mid-2020. That list prohibits U.S.-based firms and foreign companies using U.S. technologies from selling to Huawei without a license.

When reverse engineering firm TechInsights exposed the use of TSMC’s chiplet in Huawei’s hardware last year, it forced the Taiwanese semiconductor giant to halt all shipments to Sophgo. But by that time, a significant number of units had reportedly been delivered. Some analysts estimate that Huawei may have procured millions of chiplets through the arrangement.

Deception and the Difficulty of Detection

TSMC has maintained that it was not aware that Huawei was the true end user. The company claims that chip manufacturers like itself often cannot trace the ultimate origin or purpose of a chip design submitted for fabrication — particularly when the intermediary is an ostensibly independent third party like Sophgo.

Yet the complexity of the chip in question raised eyebrows. The chiplet incorporated tens of billions of transistors — an undertaking that would typically involve massive R&D budgets, design sophistication, and long lead times. For such a high-end chip to originate from a little-known company with links to a bitcoin mining hardware maker should have drawn more scrutiny, officials familiar with the investigation believe.

The U.S. Commerce Department, which has made blocking China’s access to cutting-edge AI technology a cornerstone of its national security strategy, is said to be especially incensed by the Sophgo-Huawei link. One source told Reuters that officials view the episode not as a technical oversight but as a test of the enforcement teeth behind America’s export controls.

The situation mirrors a 2023 case involving Seagate, which was fined $300 million for shipping $1.1 billion worth of hard disk drives to Huawei. At the time, it was the largest standalone penalty issued for violating U.S. export rules — a record the TSMC case may now eclipse.

Huawei’s Network of Proxies

The broader concern in Washington is the growing sophistication of Huawei’s tactics to circumvent sanctions. Sophgo is just one of several entities now suspected of operating as a front for the embattled tech giant. By outsourcing chip design to proxy firms and obscuring the real purpose of the hardware, Huawei is reportedly able to keep importing high-performance semiconductors despite being blacklisted.

A source familiar with the investigation described the Chinese firm’s strategy as “layered deception.” Huawei doesn’t just obscure its own involvement — it reportedly helps its partners disguise theirs, from design to manufacturing to packaging. The goal is to ensure that even if one intermediary is caught, the pipeline remains intact through others.

In January this year, Sophgo was also added to the U.S. Entity List, a move that further suggests U.S. authorities now see it as part of a larger subterfuge network.

TSMC’s Damage Control

Since the scandal broke in late 2024, TSMC has moved to tighten internal compliance. In addition to cutting ties with Sophgo, the company ended its relationship with PowerAIR, a Singapore-based firm that also raised red flags during an internal audit. PowerAIR’s business structure and transactions reportedly bore similarities to the Sophgo arrangement, prompting a proactive severing of ties before any violations could occur.

TSMC is also said to be working closely with the Commerce Department on the matter, though it remains unclear whether the company will try to contest the fine or seek a settlement.

Some industry experts believe that TSMC is as much a victim in this situation as it is a potential violator. The company relies on chip designs from thousands of global clients and has limited visibility into end-user intentions, especially when those clients go to great lengths to hide them.

But that argument may hold little sway in Washington. For U.S. officials, the concern is less about who knew what, and more about whether U.S. technology continues to fuel China’s military and surveillance ambitions despite the export rules.

A Growing Chill in U.S.-China Tech Relations

The TSMC episode comes at a time of heightened tension between the United States and China over technological supremacy. The Biden administration intensified restrictions on the export of AI chips, semiconductor manufacturing equipment, and advanced lithography tools to Chinese firms while urging allies like the Netherlands, South Korea, and Japan to follow suit.

TSMC, as the world’s most advanced chipmaker, is at the heart of this geopolitical crossfire. It has factories in both Taiwan and the U.S. and counts both American and Chinese firms among its major clients. As such, it walks a tightrope between satisfying Washington’s security concerns and preserving its business in Asia. The potential billion-dollar fine underscores the risks of that balancing act and the high cost of getting it wrong.

TSMC is currently waiting for an official notice. However, the implications are already reverberating through the global chip industry, where suppliers are now scrambling to verify clients and screen for red flags. The message from Washington is clear: if you help Huawei, even by accident, you will pay the price.