Bitcoin and other cryptocurrencies are still too risky – Reserve Bank

 ·24 Aug 2017

It is still too too risky for the South African Reserve Bank to start issuing virtual currencies or crypto-currencies at the moment.

This is according to Francois Groepe, deputy governor of the South African Reserve Bank, speaking in a keynote address during the Strate GIBS Fintech Innovation Conference 2017 as reported by ITWeb.

Concerns currently facing the central bank include the need to ensure that the payment methods are not abused; that they do not help fund illegal activities; and the fact that many regulators still  lack a clear understanding of how virtual currencies work, said Groepe.

“Virtual currencies have the potential of becoming widely adopted. However, for the central bank to issue virtual currencies or crypto-currencies in an open system will be too risky for us. This is something that we really need to think about,” said Groepe.

“These are: developing analysis on activities that involved in the financial services; continuous collaboration between local and global regulatory authorities; and investigating and deciding on the most appropriate structures to keep abreast of fintech developments.”

Following earlier reports, Groepe said that the that the Reserve Bank had recently created a three-member team to look into how virtual currencies work.

These currencies would be tested by the central bank in a “sandbox” environment to help fully understand how they would work in an open market.

It would also allow businesses that provide virtual currency exchange services to experiment and test new products, said Groepe.

Read: How high can Bitcoin go?

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