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Swaziland’s Central Bank is Researching Local Use of Cryptocurrencies

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Swaziland’s Central Bank is conducting research on the possibility of local cryptocurrency use in the country, according to its governor.

In a report published by The Swazi Observer, Swaziland’s Central Bank Governor, Majozi Sithole, mentioned the possibility of using digital currencies in the country while speaking at Swaziland’s 2017 Economic Forum.

Although he did not issue an official statement on the subject matter, he implied that cryptocurrencies were being studied at the Central Bank and that the bank’s officials do not want to hinder financial innovation.

Interest in Cryptocurrencies

“It may not be wise to dismiss virtual currencies and as the CBS we are learning, and we want to accept and support innovation. If this is innovation, we do not want to stifle it. We want to learn more about it. Even with Mobile Money it took time for us to know what it is and we liaised with countries that have succeeded at it,” he said to the event attendants.

And even as Sithole’s comments go on record as one of the most significant coming from the Central Bank, it is not the first time the bank has shown interest in digital currencies.

In August, an internal news circular was published where the Senior Communications Officer at the Central Bank of Swaziland, Lindokuhle Sithole Shabangu, provided a brief overview of cryptocurrencies while highlighting the research that has been ongoing for this technology.

“In essence, the Central Bank, in line with its mandate to issue and redeem currency as well as to promote safe and accessible payment systems, continues to closely monitor developments in the financial services industry with a view to ensure that the regulatory framework remains relevant and appropriate,” she stated.

Exercising Caution on Cryptocurrencies

Even as Swaziland’s Central Bank is researching cryptocurrencies, the regulation issue cannot go unmentioned. Sithole said should any issues arise around the use of cryptocurrencies, they would not have the authority to intercede as a regulator based on the fact that there are no regulatory structures around the use of decentralised cryptocurrencies.

He went on to state that there are lots of questions revolving around bitcoin and the impact it would have on monetary policy and financial stability.

The news comes barely a month after the Central Bank had stood its ground on the use of virtual currencies maintaining that they were illegal in the country.

As one of the key functions of the Central Bank is to protect its people, he gave a word of caution,

“We are aware that people are trading on these platforms and we want to caution people to be careful. This has become a topical issue globally and we are studying it and continually talking to experts on this issue.”

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