“Bitcoin is currently the number one crypto based on market capitalization ($890 billion). Its biggest differentiator is the fact that it is decentralized, meaning that it is not owned or regulated by the government. Bitcoin and other cryptocurrencies are traded online through a public ledger called a blockchain”

By Ntokozo Nkambule

Picture money that is not regulated by the global Central or Reserve Banks. Money that is not easily manipulated by the government, but is mostly influenced by the holders or investors themselves. Money that is not even held by commercial banks, but is stored in a digital wallet (source: Investopedia). Well, that is what cryptocurrency entails. Cryptocurrency refers to digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. In essence, this means as an investor you can invest anywhere in the world without the interference of the Eswatini Stock Exchange (ESE).

So where we are in Eswatini as far as crypto is concerned? The Central Bank of Eswatini (CBE) has acknowledged that it cannot stop EmaSwati from trading or investing in crypto. The CBE states that it can only caution emaSwati to be careful, but because of the nature of cryptocurrency, cannot really stop them. “The CBE advises consumers to act with caution and be mindful of the potential risks should they invest in, trade, and hold cryptocurrencies” notes the bank in a social media post. Furthermore, the CBE states that cryptocurrencies are not legal tender in Eswatini, and are currently unregulated in the country, thereby investors do not benefit from the legal protection associated with regulated instruments. It is worth mentioning that a couple of years ago the CBE in partnership with the Financial Services Regulatory Authority (FSRA) published a  notice stating that trading in cryptocurrency was illegal in the country. It appears the CBE has now realized that they cannot stop people from partaking in this activity.

Additionally, the CBE notes that it can, however, hold people who want to invest on behalf of consumers to account, as only licensed financial advisors can do that. “The CBE cannot stop consumers from trading or investing but there are measures we will continue to take to protect consumers. For instance, those who take consumers’ hard-earned money and promise to invest on their behalf are acting illegally, as only financial advisors licensed by the FSRA are allowed to do that in the country” notes the CBE.

Share With Friends