By CCN: The governor Reserve Bank of Malawi (RBM) has warned that cryptocurrencies are not legal tender and should not be used in place of the legal fiat currency, the Malawi Kwacha.
According to local media, Dr. Dalitso Kabambe released a statement in which he revealed that the central bank has observed the public's interest in cryptocurrencies has increased. He said his institution received a growing number of inquiries about cryptos from the public and other interested parties.
The governor also noted that activities involving cryptocurrency trading are on the rise in the Southern African country.
Cryptocurrency isn't legal tender, says RBM governor
The governor noted that cryptoassets are being used to carry out the functions of money or investing online. He made it clear that cryptocurrencies are not recognized by the central bank.
Reserve of Bank of Malawi wishes to advise the general public that cryptocurrencies are not legal tender in Malawi. The RBM is however aware that they are used as a means of payment or medium exchange, a store of value or invested assets online.
Kabambe pointed out that the central bank nor any other local public institution has no regulatory oversight over cryptocurrencies or activities related to them.
Cryptocurrencies, underpinned by blockchain technology, were designed to work without any central authority. Cryptocurrencies such as bitcoin are decentralized and allow anyone to participate in the creation of new coins and maintaining the network through a process known as mining.
He warned current and potential cryptocurrency users to be vigilant against crypto firms, entrepreneurs, educators, and advisors because of their questionable credibility. There are no legally registered cryptocurrency exchanges in Malawi.
The governor noted that the blockchain is a versatile technology with far more beneficial use cases that go beyond cryptocurrencies.
Malawi is currently emerging from a controversial and unpredictable election marginally won by the incumbent president. The RBM joins a number of institutions and central banks such as the Reserve Bank of India that favor blockchain over bitcoin and its ilk.
Africa's position on crypto
A number of African countries -with significant cash challenges - are adopting pro-crypto positions due to several reasons.
Zimbabwe's central bank issued a cryptocurrency ban in May last year but by September, the country's newly appointed finance minister said cryptocurrencies could potentially solve the country's cash challenges.
Zimbabwe Bans Banks from All Bitcoin Dealings https://t.co/TZpaPr4lMG
— Real Time Crypto (@RealTimeCrypto) May 14, 2018
Africa's economic powerhouse South Africa is carving its own crypto path. South Africa's Reserve Bank (SARB) successfully piloted an ethereum blockchain-based payment solution - Project Khokha - with local banks. The SARB was recognized for its effort.
‘Real-World’ Ethereum-Based Blockchain Payments Trial a Success: South Africa’s Central Bank https://t.co/YwzLUGPg9B
— CCN Markets (@CCNMarkets) June 6, 2018
Africa has made a few important steps in the cryptocurrency space but it still has a long way to go before it catches up with crypto progressive nations such as Malta, Japan, and Switzerland.