According to South Africa’s chief banker, cryptocurrencies are more related to assets than actual currencies.
Lesetja Kganyago, governor of the South African Reserve Bank (SARB), has advocated against cryptocurrency being classified as a currency. According to MoneyWeb, during an interactive session at the Wits Business School Leadership Dialogues, the central bank chief compared bitcoin to assets rather than currency.
Cryptocurrencies, according to South Africa’s central bank governor, only meet two of the three currency characteristics, as follows: “A cryptocurrency is a decentralized digital asset that serves as a medium of exchange. Although it is a means of exchange, it is not widely acknowledged. It is only accepted by those who take part.”
Kganyago’s remarks echo a recurring critique directed against Bitcoin (BTC) and cryptocurrencies by central bankers and other actors in the conventional financial system. However, cryptocurrency is gaining traction as a payment method, particularly in retail marketplaces. El Salvador was also the first government to legalize Bitcoin, a move that could be duplicated by other Central American countries.
Due to the increased acceptance of cryptocurrencies, card payment networks such as Visa and Mastercard are also adding crypto payment alternatives. In response to a question about the SARB’s cryptocurrency mandate, Kganyago stated that the central bank was aiming to regulate the cryptocurrency market in order to protect investors. Previously, crypto firms in the country claimed that a lack of clear laws was harmed the local bitcoin industry.
Indeed, the South African cryptocurrency scene has been plagued by various bogus investment programs that have defrauded unwary victims of millions of dollars. In July, the operators of South African cryptocurrency startup AfriCrypt apparently fled after $3.6 billion in Bitcoin vanished from the company’s coffers. Mirror Trading International, another well-known cryptocurrency Ponzi scheme, has garnered international notice, with the US Federal Bureau of Investigation taking part in the investigation.
Kganyago also indicated that the central bank was interested in blockchain technology and that SARB has conducted experiments with it. SARB conducted preliminary research of a possible retail central bank digital currency in May, as Cointelegraph previously reported.
Also Read: The Democratic Assembly Of El Salvador Approves $150 Million Bitcoin Trust
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