South Africa Bank: “Crypto is not a currency”

The reactions to cryptocurrencies have been mixed around the world. While countries like El Salvador have adopted Bitcoin and classified the marquee cryptocurrency as legal currency, others like India and China have been more measured in their approach – or downright hostile to virtual currencies.

Continue reading: Adults in El Salvador will receive $ 30 in crypto prior to Bitcoin legalization

South Africa is one of the countries that recently reaffirmed its national stance on the fate of digital currencies after the governor of the South African Reserve Bank (SARB) Lesetja Kganyago, reported on Monday (August 30), took a position.

According to Kganyago, the central bank has long believed that cryptocurrencies or crypto assets like Bitcoin are not currencies because they fail to meet the three most important requirements for a currency.

See also: The UK and South Africa lead discussions about late B2B payments

“First, it has to be a generally accepted medium of exchange. Second, it must be accepted as a store of value. And third, it has to be a unit of account. A cryptocurrency is a store of value. It is a medium of exchange, but it is not widely accepted. It is only accepted by those who take part, ”he was quoted as saying.

Kganyago made these remarks during a leadership dialogue at Wits University, South Africa, where he shared his thoughts on the various issues the bank had to deal with on a daily basis.

Continue reading: The UK, South Africa and China serve as key stages in the battle against late B2B payments

He also said that FinTech companies that take deposits or conduct money transfers are regulated “like a payment provider,” while companies that sell insurance policies are subject to insurance regulations.

Nonetheless, the SARB understands “the value fintech firms bring to the financial sector,” which is why the central bank has “created an innovation hub at the Reserve Bank” to support these companies, he allegedly said.



Above: Despite their price volatility and regulatory uncertainty, new PYMNTS studies show that 58 percent of multinationals are already using at least one form of cryptocurrency – especially when transferring money across borders. The new survey on Cryptocurrency, Blockchain and Global Business, a collaboration between PYMNTS and Circle, polls 500 executives and examines the potential and pitfalls crypto faces on its way into the financial mainstream.

Comments are closed.