Majozi Sithole, governor of the Central Bank of Swaziland, told delegates at the Swaziland Economic Conference this week that the bank plans to learn more about cryptocurrencies even as the CBS weighs
Majozi Sithole, governor of the Central Bank of Swaziland, told delegates at the Swaziland Economic Conference this week that the bank plans to learn more about cryptocurrencies even as the CBS weighs potential dangers. "It may not be wise to dismiss virtual currencies and as the CBS we are learning and we want to accept and support innovation," Sithole said. "If this is innovation, we do not want to stifle it. We want to learn more about it."
Concerns about bitcoin and other digital currencies persist. Sithole acknowledged the bank lacks the regulatory tools to intervene if problems materialize, since South Africa hasn't built a framework to address them. The CBS also worries about bitcoin's impact on the country's financial stability and monetary policy. "We are aware that people are trading on these platforms and we want to caution people to be careful," Sithole said. "This has become a topical issue globally and we are studying it and continually talking to experts on this issue."
The CBS has signaled interest in digital currencies before. In August, Lindokuhle Sithole Shabangu circulated an internal memo noting that the bank monitors developments in financial services to ensure regulations stay current. "In essence, the Central Bank, in line with its mandate to issue and redeem currency as well as to promote safe and accessible payment systems, continues to closely monitor developments in the financial services industry with a view to ensure that the regulatory framework remains relevant and appropriate," the memo stated.
South Africa's central bank is moving faster. The South African Reserve Bank began testing crypto regulations in July and selected blockchain firm Bankymoon as its first sandbox participant. Regulators hope that clear rules will build confidence among users.
Zimbabwe offers a different model. The landlocked nation embraced bitcoin to cope with economic collapse and runaway inflation. After printing trillion-dollar bills to address currency shortages, Zimbabwe abandoned its own currency and switched to the U.S. dollar in 2009. Now the country faces another crisis: banks restrict how much dollars citizens can withdraw. Zimbabweans turned to bitcoin as cash access tightened.
On Golix, a Harare trading platform, bitcoin commands its highest price globally. The currency traded at $12,400 earlier this week. Nigel Gambanga, a Zimbabwe-based technology analyst, told CNN that bitcoin's appeal will grow if the currency problems persist. "If trade in bitcoin intensifies with no resolution to the country's currency woes, we could witness the central bank and government revise its position by taking on a more active role in cryptocurrency trading," he said. "At the very least, (by) recognizing cryptocurrencies through some form of regulation."
