Despite the skyrocketing value of Bitcoin, Botswana is yet to embrace this cryptocurrency craze that is sweeping the world.
While other Southern African countries such as neighbouring South Africa and Zimbabwe have embraced Bitcoin, in Botswana people still have reservations about this technology.
As Bitcoin has a reputation for being unpredictable, unsafe and volatile, in Zimbabwe it has become a safe haven for many fretting over the liquidity situation in that country.
Bitcoin is described as a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds and operates independently of a central bank.
Last week, Bitcoin broke above the $12,000 mark with a total market value of about $203 billion. The Bank of Botswana (BoB) recently told BusinessWeek that it was keeping a close watch on cryptocurrencies that seem to be gradually making their way into the country.
Through its head of communications, Andrew Sesinyi, the central bank said it was 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.
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.
Investment analyst, Moemedi Mosele of Motswedi Securities stated that there is no underlying or backing of any asset for virtual currencies, noting that as such, their value seems to be a matter of speculation.
“Huge volatility in the value of Bitcoin has been noticed in the recent past. Thus, the users are exposed to potential losses on account of such volatility in value,” he said.
Consumer protection expert, Richard Harriman, who runs a local independent consumer rights and advocacy organisation, Consumer Watchdog, said Bitcoin is still very new that even financial experts have no idea of what its future will be.
“Some are already saying its days may
However, Harriman advised that if one is tempted to ‘invest’ in Bitcoin, they should do so but understand that it is a very high-risk place to put one’s money.
“Like any other such investment you should only invest money you can afford to lose. Don’t invest the rent or your loan repayments and don’t trust anyone who wants you to join their Bitcoin scheme,” he said.
Alakanani Itireleng, who is known for her efforts to support the internet-based currency ecosystem in the country, said there is skepticism in the country 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,” she said. She added that cryptocurrencies are set to play a major role in the future of money, adding that government can come up with regulations that can help monitor cryptocurrency exchange. Sethunya Kopong of the Bitclub Network, a global wealth company for the digital currency market explained that what makes Bitcoin different from normal currencies is that it can be used to buy items electronically. “In that sense, it’s like conventional dollars, euros, or yen, pulas or rands which are also traded digitally,” she said.
However, she said Bitcoin’s most important characteristic, and a trait that makes it different to conventional money, is that it is decentralised, noting that no single institution controls the Bitcoin network.
“This puts some people at ease, because it means that a large bank can’t control their money,” Kopong 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.