Bank of Botswana Says no Regulatory Framework for Crypto
According to the Bank of Botswana (BOB), there is no specific or legal framework that exists in the country pertaining to crypto assets. However, the bank did issue a warning to residents who were investing in cryptocurrencies and told them that if they were to suffer from financial losses because of these activities, they will not have any legal recourse. A statement was released by the central bank on November 10th in which it acknowledged the local residents in Botswana and said that similar to their counterparts in other countries around the world, they are also engaging in crypto trading.
Furthermore, the Bank of Botswana also acknowledged that they have received public as well as media inquiries regarding crypto-assets and had responded to them. The statement also highlighted some of the observations the central bank had made for monitoring the developments in the rising trading activities of crypto assets. The press statement issued by the BOB said that there wasn’t any regulatory or legal framework relating to an investment in cryptocurrencies in Botswana, such as bitcoin. Thus, it said that investing in any of these digital currencies was similar to investing in other intangible assets and it carried the same risks inherent in these investments.
These risks include abuse of the technologies that could be detrimental to the investors, or complete loss of value as well. The BOB has clarified that investors will not have any legal recourse if they lose their money to scams and fraudulent schemes, but they have encouraged people to do their due diligence when it comes to the legality and registration of the business. They are also advised to look into the nature of the business activity, which includes the source of returns and manner of generation. The statement from the central bank also suggests that some of the companies that conduct crypto trading may actually be scams or pyramid schemes.
Therefore, the BOB once more warned investors that there was a possibility that they could be participating in criminal activity when engaging in crypto trading. This means that from the standpoint of BOB, crypto investors could be held liable for prosecution, asset losses and even exposure to significant risks. Meanwhile, the statement also sheds light on the point of view of the central bank regarding the classification of these digital currencies as currencies. According to the Bank of Botswana (BOB), cryptocurrencies cannot be considered currencies because they don’t have the fundamental as well as complementary characteristics of currency or money, such as being a store of value or having stability.
The BOB also added that cryptocurrencies also fail as a medium of exchange that can be accepted widely or as a unit of account. As a matter of fact, the BOB said that these digital currencies don’t have any backing by the central bank or the state when it comes to transferability, legal tender status, value or exchange. This is enough warning for residents to be careful when they decide to invest in cryptocurrencies.