Central Bank Skeptical on Use of Crypto-currency
Reserve Bank of Malawi Governor, Dr. Dalitso Kabambe, says the country is not ready to embrace use of cryptocurrencies as an acceptable medium of exchange or legal tender.
Dr. Kabambe said this on sidelines of RBM 2019 monetary policy conference held in the Malawi lakeshore district of Mangochi where the topic on crypto-currency was top on the agenda.
“Private entities would want to start issuing cryptocurrencies. This is a global phenomenon. They want to use crypto-currency coins in transacting in various other products and services digitally,” Kabambe said noting that the mandate to handle this is with his office alone.
“It is critical to look at economic implications associated with cryptocurrencies. This started from a gambling background. Some individuals felt that they can issue coins that they can use in transacting in gambling.
“They felt that they can do it even in the absence of a central bank or a commercial bank. The coins you now see in the world of gambling are the root of what has become digital currencies,” he said.
Finance and Economic Planning minister, Joseph Mwanamvekha, encouraged the central bank to reflect on the matter and decide in the best interest of the economy and the country.
“We should not pretend that it is not an issue. It is happening. It is important for the country to understand crypto-currencies and their impact on the economy.
“We should look at the benefits and challenges of crypto-currencies,” said Mwanamvekha.
The minister said at the moment, government is skeptical on legalizing crypto-currency until it is clear that this does not pose regulatory challenges including tax evasion and fraud.
Mwanamvekha says Malawi will, meanwhile, continue to monitor the situation.
Some players in the business, marketing and economics circles, however, are encouraging government to seriously consider legalizing the new currencies as that is the direction the world is taking at the moment.