South Africa’s Central Bank says it prefers to refer to all cryptocurrencies as cyber-tokens and not currency. Francois Groepe, the deputy governor of the Central Bank argues that cryptocurrencies do not meet the requirements of money.
The South African Reserve Bank’s (SARB) stance could lead to an official policy in the future, however, at present, there is no policy or regulation of cryptocurrencies in the country.
The Central Bank explained that in the economic sense of a stable means of exchange, cryptocurrencies do not live up to expectations. The bank notes that cryptocurrencies do not stand out as a unit of measure and a stable unit of value.
François Groepe offered this explanation in Pretoria. He says “We want to ensure or establish whether there is still comply with the relevant financial surveillance or exchange-control regulations.”
In January, the Central Bank established a FinTech task force to monitor cryptocurrencies. The Central Bank expects the team to assist in formulating policies for regulation of cryptocurrencies.
Bridget King, the Central Bank’s banking practice director claims that cryptocurrencies are not suited to traditionally centralized supervision. She explained that “self-regulation through self-regulatory organizations may be a more likely solution.”
Other Central Banks Share Similar View Of Cryptocurrencies
The Central Bank represents the basis of the traditional financial system, one that cryptocurrencies hope to replace. It is therefore understandable when officials of most Central Banks refuse to classify cryptocurrencies as money. The South African Reserve Bank is one of many Central banks in different parts of the world that share a similar view about cryptocurrencies.
For example, the deputy governor of Israel’s Central Bank claims that cryptocurrencies like bitcoin are financial assets. He failed to see why they should be classified as currencies or foreign currencies. Mark Carney, Bank of England’s governor also claims that bitcoin has failed as a currency. He explained that it does in possess the traditional aspects of money.