Reserve Bank of Malawi cautious on crypto currency use

Post was last updated: May 29, 2019

By Chimwemwe Mangazi:

FUDZULANI—This remains a challenge

The Reserve Bank of Malawi (RBM) has warned against use of crypto currency—a digital asset designed to work as a medium of exchange—in the country, saying its use is illegal.

RBM said crypto currencies are not recognised in the country and, currently, tricksters cannot be traced if users are defrauded.

Crypto currency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

In a statement, RBM Governor, Dalitso Kabambe, say the central bank was moved by a growing number of enquiries on use of the technology.

RBM, however, advises the public that crypto currencies are not legal tender in Malawi and that no public institution has oversight over its trade or systems.

“Crypto currencies are not legal tenders in Malawi and should therefore not be used for the discharge of any obligation that suggests that they are a perfect substitute to the Malawi kwacha.

“The general public is encouraged to fully understand and be aware of the risk associated with the usage of crypto currencies and similar online schemes which include money laundering, vulnerability to cybercrimes, hacking and other fraudulent activities,” the statement reads.

ICT Association of Malawi President, Bram Fudzulani, said it is best for Malawians to exercise caution in using the technology.

He said, until proper regulations are put in place for users to be protected from fraudsters, the country should avoid use of the technology.

“We have seen, recently, a number of countries trying to keep up with the technology by putting in place a regulatory framework, Malawi, this remains a challenge because we are still trying to understand the technology.

“Suffice to say that it is one of the best technologies that many countries are adopting, I am sure, with time, our central bank is going to catch up and find ways and means to regulate the industry,” Fudzulani said.

A few weeks ago representatives of Australia-based firm, DTS International Group, were in the country to launch an online platform that links non-governmental organisations and philanthropists from across the globe to send and receive funds through a crypto currency system.

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