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Crypto does not qualify as foreign money, says South Africa’s central bank governor

Lesetja Kganyago, governor of the South African Reserve Bank (SARB), has argued towards classifying crypto as currencies.

According to a report by MoneyWeb, the central bank chief likened crypto to belongings fairly than foreign money throughout an interactive session on the Wits Business School Leadership Dialogues.

According to South Africa’s central bank governor, cryptocurrencies solely meet two of the three foreign money standards, stating:

“A cryptocurrency is a store of value. It is a medium of exchange, but is not generally accepted. It’s only accepted by those who are participating in it.”

Kganyago’s feedback are a standard criticism leveled by central bankers and different actors within the legacy monetary system towards Bitcoin (BTC) and cryptocurrencies.

However, crypto is gaining better acceptance as a fee means, particularly in retail markets. El Salvador additionally not too long ago turned the primary nation to undertake Bitcoin as authorized tender, a transfer that could possibly be replicated amongst different Central American nations.

Card fee networks such as Visa and Mastercard are additionally onboarding crypto fee choices, given the widespread adoption of cryptocurrencies.

Related: South African regulators challenge recent crypto funding warning

Commenting on SARB’s crypto mandate, Kganyago remarked that the central bank was trying to regulate the crypto market to guard buyers. Crypto companies within the nation have beforehand warned that the dearth of clear-cut rules was harming the native cryptocurrency business.

Indeed, the South African cryptocurrency scene has been rife with a number of fraudulent funding merchandise which have siphoned hundreds of thousands of {dollars} from unsuspecting victims.

Back in July, operators of South African crypto firm AfriCrypt reportedly absconded following the disappearance of $3.6 billion in Bitcoin from the agency’s coffers. Mirror Trading International, one other well-known crypto Ponzi scheme, has attracted worldwide consideration, with the United States Federal Bureau of Investigation taking part within the probe.

Kganyago additionally revealed that the central bank was all in favour of blockchain and that SARB experimented with the novel know-how. As beforehand reported by Cointelegraph, SARB started the preliminary examine of a doable retail central bank digital foreign money again in May.