BoB keeps hawkeye on digital currencies

Moses Pelaelo's BoB is monitoring new payment methods
Moses Pelaelo's BoB is monitoring new payment methods

The Bank of Botswana (BoB) says it is keeping a close watch on cryptocurrencies that seem to be gradually making their way into the country.

Cryptocurrencies, described as digital or virtual currencies that use cryptography for security, are yet to be brought under any regulatory framework in Botswana.

Bitcoin, a virtual currency whose value has been soaring in international markets in recent months, is  said to be by far the most famous of these cryptocurrencies.

According to BoB’s head of communications, Andrew Sesinyi the central bank is aware of technological developments relating to the banking sector. However, he said while innovation in all aspects of the financial industry has the potential to yield public benefit, there would be a requirement for an appropriate regulatory framework for all relevant technologies.

“The bank does not regulate cryptocurrencies and/or related distributed ledger technologies (DLTs) and is thus not undertaking any studies in that direction,” Sesinyi said. He added that with regard to digital currencies, the general view is that existing technology is not sufficiently mature to fulfil all the requirements of the banking sector.

“As is the case with most central banks, the BoB is keeping an open mind and is monitoring developments as they unfold,” he said. Sesinyi however said the Bank has not received any application pertaining to the running of the internet-based payment system.

The central bank’s comments came at the back of an announcement by a local financial technology firm, Satoshicentre that it was looking to build an exchange for cryptocurrencies.

A cryptocurrency exchange is an online platform, which people can buy, sell or exchange cryptocurrencies such as Bitcoin for another digital currency or fiat money. Satoshicentre chief executive officer, Alakanani Itireleng, who is known for her efforts to support the internet-based currency ecosystem in the country, said cryptocurrencies are set to play a major role in the future of money.

However, she said there is a lot of skepticism because of the rising tide of cybercrime and money laundering. “We cannot shy away from the fact that cryptocurrency transactions are happening in Botswana, and an exchange could come in hand,” Itireleng said.

For example, she said there are distributed technologies used by governments and ‘near’ instant payments, adding that they are a result of technologies such as Bitcoin.

“I believe that we can come up with regulations that can help monitor cryptocurrency exchange,” she said. Meanwhile, some businesses in the country have started using Bitcoins as cryptocurrencies gain traction.

Examples are Sharada Clinic, a private clinic and Bitbrands Digital Marketing, a digital marketing firm, that both accept Bitcoins as a form of payment.

There is a growing consensus that cryptocurrencies will become more popular in the country in years to come, and that more businesses and entities will start using them as a form of payment.

According to Wikipedia, the legal status of Bitcoin varies substantially from country to country and is still undefined or changing in many of them. “While some countries have explicitly allowed its use and trade, others have banned or restricted it,” it said.

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