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CBS CAUTIOUS, BUT ASSESSING POSSIBILITY OF EMBRACING CRYPTOCURRENCIES

By Majaha Nkonyane | 2017-10-31

ALTHOUGH the Central Bank of Swaziland (CBS) remains cautious on embracing the use of cryptocurrencies, CBS Governor Majozi Sithole says they are assessing the possibility of using them in the country. 

This was disclosed by CBS Governor Majozi Sithole during the recently ended Swaziland Economic Conference (SEC) 2017.

He said while they have a cautious mind towards the use cryptocurrencies, at the same time, they don’t want to stand in the way of innovation. 

“It may not be wise to dismiss virtual currencies and as the CBS we are learning and we want to accept and support innovation. If this is innovation, we do not want to stifle it. We want to learn more about it. Even with Mobile Money it took time for us to know what it is and we liaised with countries that have succeeded at it,” he said.

According to information sourced from the internet, cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds and they operate independently of central banks. Sithole said the financial technology space where Bitcoin falls under was not regulated which then poses a risk to those that are trading with it.

He said should problems arise around the use of such Fintech, they would not be able to intervene as a regulator because of the absence of regulatory structures around Fintech. He said there were a lot of questions around the Bitcoin on what impact it would have on financial stability and how it would impact Monetary Policy amongst other things.

One of the functions of the central bank is to protect the public.

“We are aware that people are trading on these platforms and we want to caution people to be careful. This has become a topical issue globally and we are studying it and continually talking to experts on this issue,” he said.

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