South Africa’s central bank is choosing to call cryptocurrencies like bitcoin as ‘cyber-tokens’ rather than currencies, arguing they do not ‘meet the requirements of money’.
The South African Reserve Bank (SARB), the country’s central bank, prefers to see cryptocurrencies as ‘tokens’ rather than currencies according to deputy governor Francois Groepe.
As things stand, the authority has not outlined any policies or a regulatory framework for the cryptocurrency sector. Even so, the central bank’s current outlook could lead toward an official policy sometime in the future.
In quotes reported by Bloomberg, the central bank official explained:
We don’t use the term ‘cryptocurrency’ because it doesn’t meet the requirements of money in the economic sense of the stable means of exchange, a unit of measure and a stable unit of value…We prefer to use the world ‘cyber-token’.
It isn’t immediately clear why the official weighed in on the still-unofficial stance on cryptocurrencies but the deputy governor offered his remarks while speaking to reporters in Pretoria, one of South Africa’s three capital cities, on Thursday.
Having established a FinTech task force earlier in January, the SARB also installed a self-regulatory body tasked to review and outline a regulatory framework for the cryptocurrency sector in April. “[S]elf-regulation through self-regulatory organisations (SROs) may be a more likely solution for the regulation of cryptocurrencies,” the central bank’s banking practice director Bridget King said, claiming cryptocurrencies aren’t suited to traditional centralized supervision afforded to the banking and financial sectors.
In revealing the SARB’s position on cryptocurrencies yesterday, Groepe touched on the FinTech unit at play, stating:
“We want to ensure or establish whether there is still compliance with the relevant financial surveillance or exchange-control regulations.”
At the fundamental core, central banks represent the very basis of a traditional financial system that cryptocurrencies are meant to disrupt. No surprise then that most central banks and their officials offer a skeptical take with many, like the SARB, refusing to classify cryptocurrencies as money.
Elsewhere, the deputy governor of Israel’s central bank also claimed bitcoin and other digital currencies weren’t currencies nor foreign currencies but a ‘financial asset’ instead, earlier this year. Bank of England governor Mark Carney opined bitcoin had ‘failed’ as a currency so far on possessing the ‘traditional aspects of money’.
To South Africa’s north within the continent, a recent effort by Zimbabwe’s central bank to ban financial institutions from providing services to the cryptocurrency exchanges and the wider industry was quickly snuffed by the High Court in Harare yesterday.