By Majaha Nkonyane | 2018-03-11
GOVERNOR of the Central Bank of Swaziland Majozi Sithole has described virtual currencies as being a threat to the country’s financial stability, amongst many other disadvantages.
Sithole was speaking in a historic open lecture held at the University of Swaziland where South African Reserve Bank Governor Lesetja Kganyago and governor of the central bank of Namibia, UNISWA students, lecturers and other staff members also crammed the institution’s Sports Emporium to participate in this rare occasion on Wednesday.
“Threats to financial stability within the Common Monetary Area (CMA) include proliferation of virtual currencies as one of the exogenous challenges facing monetary authorities. A virtual currency is a unit of account that is digitally or electronically created and stored,” he said.
One of the most popular virtual currencies in Swaziland is Bitcoin. Sithole said one of the biggest challenges with virtual currencies was the fact that they were not regulated whilst central banks regulated monetary policy with the ministry of finance regulating fiscal policy, on the other hand.
Sithole mentioned that members of the virtual community agree to accept these units as a representation of value in the same way that currency is accepted.
As opposed to other currencies which are monitored by the central banks, virtual currencies are not.
He also said that virtual currencies such as Bitcoin allowed users to purchase goods and services without using a government-backed currency so long as participants were willing to accept Bitcoin as a form of payment.
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