IN July, deputy governor of the South African Reserve Bank (SARB) Kuben Naidoo announced that the bank would be introducing new regulations around trading cryptocurrency.
In making the announcement, Naidoo said most central banks were now focused on regulating the broader crypto-environment; learning and seeing how it can be used. He said the idea was not to regulate it as a currency but as a financial asset. The response from the market was positive and it appears the market has stolen the march.
This week Pick n Pay announced it will soon be allowing customers to pay for groceries with crypto at 39 stores in South Africa. Reporting on the development, TechCentral quoted the retailer saying: “Increasingly cryptocurrency is being used by those underserved by traditional banking systems.”
In last week’s episode of In Conversation with Trevor, Anita Posch said Bitcoin is unstoppable. She maintains that “Bitcoin might be our only tool to secure the human right to privacy and freedom of transaction.” She says Bitcoin is a “medium of liberation for billions of people and a defence mechanism for privacy in our ever more digital lives.”
Central banks and the banking sector must take note. What is it that is attracting the public, particularly the unbanked, to cryptocurrency? Instead of creating hurdles towards the adoption of cryptocurrency, authorities must do as the SARB is doing i.e., seek to understand and then look at light touch regulation to guide and protect the public.
We are at the beginning of something huge that has the power to fast-track financial inclusion, power the creator economy and the world economy. There is both risk and opportunity — cautious optimism is the way to go.