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.
Kganyago made these remarks during a leadership dialogue at South Africa’s Wits University, where he shared his thoughts on the various issues the bank was dealing with on a day-to-day basis.
He also shared that FinTech firms that take deposits or carry out money transmissions will be regulated “like a payments provider,” while firms that sell insurance policies will be subject to insurer regulations.
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.