South African Central Bank: Cryptocurrency Cannot Replace Fiat Currency

One of the most respected, and sought-after banking professionals in South Africa, has recently addressed the issue concerning cryptocurrencies. At present, the market cap for the cryptocurrency market is valued around $2.17 trillion. It has become more and more impossible for governments and state authorities to ignore the growing cryptocurrency trading in every part of the world.

The governor for South African Reserve Bank or SARB has recently claimed that digital assets are not a viable alternative for fiat and paperback. Governor Lesetja Kganyago spoke on behalf of his financial institution about not approving Bitcoin or any other virtual asset as a legal tender. He was addressing a conference at the Wit Business School when he claimed that cryptocurrencies are more suited for the role of an asset class.

South African Government Wants to Implement Better Crypto Regulations in the Region

The governor of SARB, Kganyago, was chairing the Leadership Dialogues recently when he revealed that there is a need for better cryptocurrency laws in the region. There are several central bank leaders and traditional finance chiefs who hold the same stance towards cryptocurrency markets. He further added that cryptocurrency could act as a store of value, and they made for a good exchange commodity.

However, he claimed that those who are not engaging voluntarily in crypto trading are not the ones who would accept it as a legal tender. There is also a debate going on among the citizens of El Salvador about accepting Bitcoin as an official state currency. The business community believes that such a transition can create issues for them in the long run due to the high volatility of assets like Bitcoin.

Over the last few months, there have been several big crypto-related scams taking place in South Africa. A cryptocurrency exchange named Africrypto folded business without warning and took off with cryptocurrencies valued at $3.6 billion. The scam that took place in July is considered one of the biggest cryptocurrency scams of all time.

Another major incident took place when the regulators in SA declared Mirror Trading International a Ponzi scheme. The FBI is currently collaborating with the government of South Africa to investigate the full extent of the fraudulent operations. Governor Kganyago told the media that the central bank is interested in the use of blockchain technology for starting a new project like a CBDC.

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