Cryptocurrencies are quite confusing, to be honest. It seems very few people fully understand cryptos and those who do are usually unable to fully explain how the digital currencies work to the general populace.
Is South Africa back-tracking?
South Africa which has long been considered one of the pioneers in Africa when it comes to embracing cryptocurrency seems to be adopting a more cautious approach in regards to cryptocurrencies. The Deputy Governor of the South Africa Reserve Bank (SARB), Francois Goepe, has gone on record saying they choose to call these coins crypto-tokens and not currencies.
The Deputy Governor said:
We don’t use the term ‘cryptocurrency’ because it doesn’t meet the requirements of money in the economic sense of the stable means of exchange, a unit of measure and a stable unit of value. We prefer to use the word ‘cyber-token.’
Unlike our own central bank, the SARB has not opted for an outright ban but instead has deployed a fintech unit which will carry out research and ensure that however cryptos are used they still comply with the exchange control regulations. We’ve argued time and time again that this is a better approach than an outright ban.
What needs to happen for cryptos to become viable mediums of exchange?
The problem with cryptos right now seems to be that of use cases and the fact that they are used to circumvent regulatory authorities. As much as people would like financial ‘autonomy’ (or whichever buzzwords are being thrown about), regulations are meant to protect people.
Lack of awareness…
As a technology in its formative years, cryptos still have a long road ahead of them if they are to become the default currency. Cryptocurrency enthusiasts seem to believe the cryptos are the answer but right now the lack of awareness means that in reality, cryptos have a niche community that understands them whilst the general public have no idea how it all really works. This disconnect is what will continue to discourage the use of cryptos and until that is solved I don’t see cryptos taking over from traditional currencies.
What do you think? Are cryptocurrencies indeed the future or is there too much uncertainty still surrounding them for us to know? Would love to know your thoughts on this, so let’s engage in the comments below.