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Debate rages on cryptocurrency

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Bram Fudzulani

The Reserve Bank of Malawi (RBM) has said it is still weighing options on use of cryptocarrency as a legal tender amid consultations with stakeholders.

Use of digital currency remains illegal according to the central bank despite being used in some circles as a medium of exchange or means of payment.

Cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.

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It including Bitcoin, Litecoin, Ethereum, Zcash, Dach and Ripple.

RBM General Council and Bank Secretary, George Chioza, said on the sidelines of the Financial Services Lawyers Conference that Malawi is yet to decide on use of the digital currency.

“At the moment, Malawi is really on the border line. We have not said yes or no but we know there are cryptocurrencies. Take caution when you are dealing in those currencies,” Chioza said.

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Making a presentation at the indaba, RBM’s Ethics and Compliance Manager, Thabo Chakaka Nyirenda, said use of complex mathematics makes it difficult to monitor cryptocurrency transactions and check money laundering.

He said the dilemma is that some commentators have expressed fears that outright banning of digital currencies 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 the benefits.

In a separate interview, ICT Association of Malawi president, Bram Fudzulani, said Malawi needs cryptocurrencies.

“Malawi is still grappling with regulations to do with financial technologies to allow co-existence of financial technology players as well as traditional banks in a way promotes interoperability and competition.

“However, cryptocurrencies are something we need as a country and its something Fin-techs bring in the market but we need to deal with the fundamental issues we have on our plate,” Fudzulani said.

He emphasised that there is need for heavy consumer awareness and protection before implementing the same.

In 2015 Global money laundering and terrorist financing watchdog, the Financial Action Task Force asked countries to indicated whether within their jurisdictions they allow cryptocurrencies or not.

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