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According to South Africa’s chief banker, cryptocurrencies are more related to assets than actual currencies.
The governor of the South African Reserve Bank (SARB), Lesetja Kganyago, has advocated against crypto being classified as a currency.
According to a report by MoneyWeb, the central bank chief likened crypto to assets rather than currency during an interactive session at the Wits Business School Leadership Dialogues.
According to South Africa’s central bank governor, cryptocurrencies only meet two of the three currency criteria, 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 remarks echo a recurring critique thrown against Bitcoin (BTC) and cryptocurrencies by central bankers and other actors in the legacy banking system.
However, cryptocurrency is gaining acceptability as a payment method, particularly in retail marketplaces. El Salvador was also the first Central American country to accept Bitcoin as legal cash, a move that other Central American countries may follow.
Given the growing acceptance of cryptocurrencies, card payment networks such as Visa and Mastercard are also adding crypto payment options.
Kganyago commented on the SARB’s crypto mandate, stating that the central bank was aiming to regulate the crypto market in order to protect investors. Previously, crypto firms in the country worried that a lack of clear laws was damaging the local cryptocurrency economy.
Indeed, the South African cryptocurrency market has been riddled with a slew of bogus investment products that have taken millions of dollars from unsuspecting victims.
Back in July, the operators of South African crypto firm AfriCrypt allegedly fled after $3.6 billion in Bitcoin vanished from the company’s coffers. Mirror Trading Worldwide, another well-known crypto Ponzi scheme, has sparked international interest, with the US Federal Bureau of Investigation taking part in the investigation.
Kganyago also stated that the central bank was interested in blockchain technology and that SARB has tested with it.
SARB, as previously reported by Cointelegraph, conducted early research into a potential retail central bank digital currency in May.