The Reserve Bank of Malawi (RBM) has joined several other countries to warn its citizens against the possible dangers of cryptocurrency investments as well as related schemes.
RBM Governor, Dalitso Kabambe released the warning statement against crypto investments on Monday following a series of inquiries and increased public interest towards cryptocurrencies especially on social media, NyasaTimes reported.
Mr. Dalitso Kabambe said in the statement that cryptocurrencies are not a legal tender in the country– Malawi, hence it should not be used as an alternative to the country’s currency, known as “Kwacha.”
RMB bears the full responsibility to issue a legal tender in the form coins and banknotes in Malawi and has not issued any form of crypto, he confirmed.
Next, the official deliberated on the risks associated with using cryptocurrencies, especially since transactions on cryptocurrencies are anonymous.
He stated among several things that citizens who intend to invest in cryptocurrency are likely to lose money to notable risks such as hacks, money laundering, fraudulent activities, and security breaches.
Also, he suggested that the chances of Malawi investors losing their funds are significantly high, as most cryptocurrency investment platforms operate outside Malawi. It will be challenging to hunt down “perpetrators in the event of fraud or other forms of malpractices” according to the top official.
To drive home the point, Mr. Kabambe reminded Malawians that neither the RBM or any other agency regulate cryptocurrency activities in the country. He said the “users risk losing their money since no regulatory protection exists to compensate them should the cryptocurrency scheme fail.
Tough Stance, Not Final for Malawi
The Central Bank Governor admitted in his statement that the RBM is aware of the potentials embedded in blockchain technology since the underlying system powering most cryptocurrencies has other relevant use cases.
To this end, he stated that the country would continue to watch the global developments around technology and can review its stance and regulatory position if necessary.