South Africa central bank chief declines to call bitcoin a currency

Cryptocurrencies meet the definition of an asset, not a currency. This was stated by Lesetja Kganyago, chair of the South African Reserve Bank (SARB), during a speech at Wits Business School, MoneyWeb.

The official noted that digital assets meet only two of the three criteria for currency.

“This is not a generally accepted medium of exchange. Only those who participate in it think so,” — Kganyago said.

The head of the central bank confirmed the regulator’s interest in experimenting with blockchain technology. In May it was announced that SARB will complete the techno-economic justification for the digital rand in 2022.

Kganyago also said that the central bank aims to bring the cryptocurrency market within its regulatory reach. Industry representatives had urged this, noting the negative effect of the absence of legal certainty.

In April, the crypto investment firm Africrypt in the country went bankrupt with losses of $3.6bn. Subsequently, this amount was revised to less than $200m.

The South African Financial Sector Conduct Authority brought forward for consideration a proposal to regulate cryptocurrencies.

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