The hype and volatility surrounding cryptocurrencies, and the technology underpinning them, have led to significant global interest not only from private organisations, individuals and financial institutions but also from governments and regulatory bodies who are taking note of this disruptive trend.
The South African Reserve Bank's current stance on cryptocurrency, is that for any participants in this space, the risk is theirs. Currently, in their view, cryptocurrency is not a legal tender, it’s not cash, coins or commercial bank money, nor is it issued by any central entity. The Reserve Bank and regulators in the financial sector are keeping a close tie to this disruptive technology with some important questions needing to be addressed. What risks are involved in cryptocurrency transactions? What is the legal definition of this tender? What are the underlying risks in this system? These are just some of the questions being raised by the South African Reserve Bank and other regulators within the financial sector.
Dr Arif Ismail, Head of Fintech at the South African Reserve Bank, sits down with Gareth Cliff in this Decrypto podcast to discuss the inside structures that currently exist surrounding cryptocurrencies.
Key takeaways:
- From a government perspective, it seems the most important aspect is to first understand what’s going on in the cryptocurrency landscape. The current global trend revolves around the fact that the uptake of cryptocurrencies seems to be for speculative purposes.
- It’s important to be aware and proactive towards the potential this market holds.
- One of the major concerns from the South African Reserve Bank is that although both the volumes and values are minute, people are losing value due to the high volatility. One way to mitigate this would be to caution members of the public that if they’re buying cryptocurrencies, the risk therein is theirs and that their investment may potentially lose value.
- Real value may be added to the volatility of cryptocurrencies by applying light-touch regulations that allow for transparency and reporting.
Link to full episode: https://iono.fm/e/617689
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