South African Reserve Bank (SARB) governor Lessetja Kganyago argues against the classification of crypto as currency.
In an interactive session during the Leadership Dialogues hosted by Wits Business School, the central bank chief described crypto assets as opposed to currency.
In South Africa, the central bank governor provides two reasons why cryptocurrencies do not meet the three criteria for currencies.
READ: South Africa’s GDP rises by $37 billion after GDP revision
Cryptocurrencies are regarded as a form of digital money. The medium of exchange isn’t usually accepted as a standard. “Only the participants accept it.”
The central bankers and other players in the legacy financial system often make similar attacks on Bitcoin and crypto assets in the form of criticism.
Yet, crypto is being accepted more and more as a means of payment, particularly in retail markets. Aside from the adoption of Bitcoin as legal tender, El Salvador has become the first country in Central America to adopt it.
READ: South Africa moves to regulate cryptocurrencies
Several credit card networks are integrating crypto payments into their platforms, as cryptocurrency usage has risen rapidly over the past few years.
In response to Kganyago’s comments on SARB’s cryptocurrency mandate, he said the central bank was seeking to regulate the cryptocurrency market to protect investors. A previous report has stated that the lack of coherent rules was hurting local cryptocurrency businesses.
READ: How MTN Nigeria’s troubles could affect South Africa’s financial system
In fact, the crypto market in South Africa has been riddled with scam products that have defrauded unsuspecting investors of millions.
AfriCrypt’s operators disappeared in July after $3.6 billion in Bitcoin vanished from the firm’s coffers. The United States Federal Bureau of Investigation is investigating Mirror Trading International, another well-known crypto ponzi scheme.
