According to the Bank of Botswana, there is no specific regulatory or legal framework for crypto assets. However, the bank warns residents who invest in cryptocurrency that there is no recourse if they are harmed.
The Response of the Central Bank To Public Inquiries
On November 10, the BOB released its first statement. It acknowledges that many local people are involved in cryptocurrency trading, much like other citizens around the globe. Additionally, the BOB stated that the bank has responded to inquiries from the media as well as the public regarding cryptocurrency trading.
Next is a statement that shares some of the observations the central bank made as it monitored the growing trade in crypto assets.
“There is no specific legal or regulatory framework pertaining to, or proscribing investment, in crypto assets, such as bitcoin in Botswana. Therefore, trading in bitcoin or similar decentralised technologies, also known as ‘cryptocurrency’, is akin to investment in any other intangible assets with attendant risks, inherent in such investments, such as complete loss of value or possible abuse of the technologies to the detriment of investors,” explained the BOB press statement.
While the BOB insists there will be no legal recourse for cryptocurrency investors that lose money to fraudulent schemes, the bank does urge investors to “undertake due diligence on the registration and legality of the business, as well as the nature of the business activity, including the manner of generation and source of returns.”
It’s not real currency, Cryptocurrency
The central bank’s statement also suggests that the underlying activity of some of the companies engaged in crypto trading may relate to pyramid schemes and scams. As such, the BOB again warned investors engaged in cryptocurrency trading that they could be “participating in criminal activity.” This from the BOB’s standpoint means these crypto investors may be “liable for prosecution and/or exposure to a significant risk of financial and asset losses.”
In the meantime, the statement also makes known the BOB’s views concerning the classification of cryptocurrencies as currencies. The central bank claims that this misunderstands the reference to cryptocurrency because they don’t exhibit key fundamental and complementary characteristics of currency or money, such as being stable stores of value.
The BOB also states that cryptocurrencies are not accepted as a currency or unit of account. More importantly, from the BOB’s perspective cryptocurrencies have no backing by the state or central bank with respect to legal tender status, transferability, exchange, or value.
Comment on this statement from the BOB. Let us know what you think about this statement by the BOB in the comment section below.
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