Malawi reconsidering legal status of cryptocurrencies
With pressure mounting over the use of cryptocurrencies in Malawi, the country’s Reserve Bank has indicated it could adopt the currency as a legal tender.
The Reserve Bank of Malawi (RBM) ethics and compliance manager Thabo Chakaka Nyirenda said the dilemma is that some stakeholders have expressed fear that outright banning of digital currency would force users to go underground where they will continue to operate without anti-money laundering oversight, hence the need to counterbalance the risks and benefits.
Speaking on the sidelines of the Financial Services Lawyers conference, Nyirenda said the problem is that the use of complex mathematics makes it difficult to monitor cryptocurrency transactions and check money laundering.
The use of cryptocurrencies, including Bitcoin, Litecoin and Ripple, remains illegal in Malawi with RBM having warned that cryptocurrencies should not be considered a legal substitute to the local currency.
The Bank has also warned that it does not approve or recognise any inbound or outbound foreign investment in cryptocurrencies.
RBM general council and bank secretary George Chioza said they are consulting with stakeholders on the way forward regarding the use of cryptocurrency in the country and will soon make a decision.
Chioza was quoted by the local Times newspaper saying, “At the moment, Malawi is really on the borderline. We have not said yes or no but we know there is cryptocurrency. Take caution when you are dealing in these currencies.”
Stakeholders, including the ICT Association of Malawi and the Economic Association of Malawi, have piled on pressure on the Bank to allow the use of cryptocurrency in the country.
The ICT Association of Malawi president Bram Fudzulani said Malawi needs cryptocurrencies. “Malawi is grappling with regulations to do with financial technologies to allow co-existence of financial technology players as well as traditional banks in a way that promotes interoperability and competitions. Cryptocurrencies are something we need as a country.”