Governor Of South African Apex Bank Argues that 'Crypto Not A Currency'

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Governor of South Africa’s Reserve Bank (SARB), Lesetja Kganyago has revealed his stance on cryptocurrencies, adding to the myriad of critical comments about them. He argued that they are not currencies given that their features fall short of the requirements of a currency. Still, governor Kganyago’s position reiterates the existing opinion of South Africa’s apex bank about Bitcoin and other crypto-assets.

At a Saturday dialogue with Mills Soko, a professor at South Africa-based Wits Business School, the central bank governor noted that cryptocurrencies are merely crypto assets and need to pass three litmus tests before they can be regarded as a currency. He outlined these tests as follows; general acceptance, store of value, and medium of exchange.

According to him, while cryptocurrencies may be regarded as a store of value and a medium of exchange, they are not generally accepted. ‘They are only accepted by people participating in it,’ governor Kganyago added.

During the dialogue that bordered on economic issues within the country, the governor of the SARB also highlighted the need for regulation of crypto-assets since they are volatile, and people are also likely to criticize the government for laxity when they lose their money after investing.

However, he acknowledged the importance of blockchain technology and how it can be employed for other uses.

When asked what he thought about fintech firms in South Africa, the governor asserted that he thinks they are good for economic and financial growth. Notwithstanding, they would require regulation given the services they provide. So if they provide deposit services, they will be regulated as one.

Meanwhile, a survey conducted earlier this month revealed that 15% of South African adults have cryptocurrencies. Industry experts were quick to fault the findings as they claimed the survey did not account for the large adult population in South Africa.

As earlier reported by Diutocoinnews, cryptocurrency scams are now rampant in the country, adding to the worry of the South African Government. The latest occurred in July where South African investors lost up to 69,000 BTC valued at $3.5 billion.