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Malawi's Central Bank toughens up on cryptocurrencies

By , ITWeb’s Zambian correspondent.
Malawi , 30 May 2019

Malawi's Central Bank toughens up on cryptocurrencies

The Reserve Bank of Malawi said that digital currencies (cryptocurrencies) are not legal tender in the country and should not be considered a legal substitute to the local currency.

Bank governor Dalitso Kabambe warned that no public institution in Malawi, including the Central Bank, has oversight responsibility over cryptocurrency trade, systems or the intermediaries such as Bitcoin, Litecoin and Ethereum.

He added that the Central Bank will also not approve or recognise any inbound or outbound foreign investment in cryptocurrencies.

Kabambe said that all activities related to the buying, trading or usage of cryptocurrencies are performed at own individual risk, as there are no legal consumer recourse channels currently available.

He said that the online and borderless nature of cryptocurrencies mean that most of the trading is conducted via systems and platforms that are based outside Malawi and the bank has no control over the systems.

"The Reserve Bank of Malawi bears the exclusive mandate to issue legal tender that is bank notes and coins and has not issued any form of cryptocurrency. The public is encouraged to fully understand and be aware of the risk associated with the use of cryptocurrencies, which include money laundering, vulnerability to cybercrime and hacking," Kabambe said.

He said by their design, there is anonymity of the virtue account holders as physical identities of person behind any of the transactions are not recorded.

Meanwhile, the Economic Association of Malawi president Chikumbutso Kalilombe was quoted by Malawi's Nation newspaper saying, "considering that financial literacy in Malawi stands at 30%, there is need to do civic education to empower people with information on the cryptocurrencies market."

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