Reactions to cryptocurrencies have been mixed across the world. While countries like El Salvador have embraced bitcoin and classified the marquee cryptocurrency as legal currency, others like India and China have been more measured in their approach — or downright hostile toward the virtual currencies.
South Africa is one of the countries to recently affirm its national position on the fate of digital currencies, following remarks by the Governor of the South African Reserve Bank (SARB) Lesetja Kganyago, as bitcoin.com reported on Monday (Aug. 30).
According to Kganyago, the central bank has long held the belief that cryptocurrencies or crypto-assets like bitcoin are not currencies due to their failure to meet the three key standards required of a currency.
“One, it must be a generally accepted medium of exchange. Secondly, it must be accepted as a store of value. And thirdly, it must be a unit of account. 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,” he was quoted as saying.
Nonetheless, the SARB understands “the value that the FinTech firms bring to the financial sector,” which is why the central bank has “created an innovation hub at the Reserve Bank” to support these businesses, he reportedly said.
John Paulson raked in billions by taking advantage of the U.S. 2008 real estate debacle and now has shared that he sees cryptocurrency as a shaky investment he’s steering clear of, Bloomberg reported Monday (Aug. 30).
Paulson argued the “limited supply of nothing” will equal zero, according to the report. He said he “would say that cryptocurrencies are a bubble.”
“So, to the extent there’s more demand than the limited supply, the price would go up,” he said, per the report. “But to the extent the demand falls, then the price would go down. There’s no intrinsic value to any of the cryptocurrencies except that there’s a limited amount.”
“Cryptocurrencies, regardless of where they’re trading today, will eventually prove to be worthless,” he added. “Once the exuberance wears off, or liquidity dries up, they will go to zero.”
Paulson’s stance isn’t expected to have a lot of fans since digital assets largely rose up and beyond forecasts. Paulson also flipped his hedge fund company into “a family office” in 2020 following the seesaw of asset value to a low of $9 billion in 2019 from a height of $38 billion in 2011, the report stated.