Bank of South Africa: “Crypto is not a currency”

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Reactions to cryptocurrencies have been mixed across the world. While countries like El Salvador have embraced bitcoin and classified high-profile cryptocurrency as legal tender, others like India and China have been more moderate in their approach or downright hostile to virtual currencies.

Read more: Adults in El Salvador get $ 30 in crypto ahead of Bitcoin’s legalization

South Africa is one of the countries to have recently affirmed its national position on the fate of digital currencies, following remarks by South African Reserve Bank (SARB) Governor Lesetja Kganyago, as reported by bitcoin.com reported on Monday August 30.

According to Kganyago, the central bank has long believed that cryptocurrencies or crypto-assets like bitcoin are not currencies due to their failure to meet the three key standards required of a currency.

See also: UK and South Africa speed up discussions on late B2B payments

First, it must be a generally accepted medium of exchange. Second, it must be accepted as a store of value. And third, it must be a unit of account. A cryptocurrency is a store of value. It is a medium of exchange but is generally not accepted. This is only accepted by those who participate, he said.

Kganyago made the remarks during a leadership dialogue at Wits University in South Africa, where he shared his thoughts on the various issues the bank faces on a daily basis.

Further reading: UK, South Africa and China serve as key milestones in tackling late B2B payments

He also explained that FinTech companies that accept deposits or make money transfers will be regulated as a payment provider, while companies that sell insurance policies will be subject to regulation by insurers.

Nonetheless, the SARB understands the value FinTech companies bring to the financial sector, which is why the central bank has created an innovation hub at the Reserve Bank to support these companies, he reportedly said.

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NEW PYMNTS DATA: 58% OF MULTINATIONAL COMPANIES USE CRYPTO-CURRENCY

By the way: Despite price volatility and regulatory uncertainty, a new study from PYMNTS shows that 58% of multinational companies are already using at least one form of cryptocurrency, especially when transferring funds across borders. The new Cryptocurrency, Blockchain and Global Business survey, a PYMNTS and Circle collaboration, polling 500 executives examines the potential and pitfalls that crypto faces as it becomes part of the mainstream financial sector.

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