Digital currencies don\u2019t meet the three criteria that define a currency, according to the head of South Africa\u2019s central bank. Lesetja Kganyago, the governor of the South African Reserve Bank, further called on regulations for the industry, even as the country sees multi-billion dollar BTC scams.<\/p>\n
South Africa is one of the continent\u2019s leaders in digital currency adoption, ranking behind leader Kenya, Nigeria, and Togo\u00a0according\u00a0to the 2021 Chainalysis Global Crypto Adoption Index. The country also boasts of being home to some of the region\u2019s largest digital currency startups, led by Bitcoin SV wallet Centbee and exchanges such as VALR.<\/p>\n
However, despite this adoption, the head of the country\u2019s central bank believes that digital currencies are not currencies. Rather, they are assets, he stated in a recent\u00a0interview.<\/p>\n
Lesetja outlined the three criteria a currency must meet, the first of which is it must be an acceptable medium of exchange. It must also be accepted as a store of value and thirdly, it must be a unit of account.<\/p>\n
\u201cA cryptocurrency is a store of value. It is a medium of exchange, but is not generally accepted. It\u2019s only accepted by those who are participating in it,\u201d he stated.<\/p>\n
Lesetja\u2019s criticism comes at a time when South Africans have taken to using digital currencies for day-to-day payment, led by the\u00a0pioneering services offered by Centbee. The Johannesburg-based startup allows users to spend their Bitcoin (BSV)\u00a0on day-to-day needs\u00a0such as airtime purchases, paying electricity bills, paying for their Uber rides, online subscriptions such as Netflix and Apple Music, and more. Centbee also\u00a0integrated bank withdrawals\u00a0for those that require to convert their BSV into South African rand.<\/p>\n
The governor acknowledged\u00a0the need for regulations in the rapidly growing industry.<\/p>\n
\u201cOur approach is that we are going to have to regulate this because people go and invest in cryptos and when they lose money, they ask what government has done about it,\u201d he stated.<\/p>\n
South Africa has been home to Africa\u2019s largest digital currency scams, with none bigger than the\u00a0Africrypt BTC scam. Two young brothers are alleged to have ran off with $3.6 billion in BTC, even though they have\u00a0denied\u00a0the accusations and claimed they were hacked. They did flee the country, which they claimed was because they feared for their lives.<\/p>\n
Watch: CoinGeek Zurich panel, Blockchain & the Future of Africa<\/p>\n