Botswana Central Bank cautions against crypto risks, urges regulation
Botswana’s central bank has recognized the growing interest in crypto like Bitcoin and highlighted their potential impact on the financial system. Although it sees minimal direct risks at the moment, the Bank of Botswana has stressed the need for proper regulation to protect users and ensure stability.
Crypto, it says, lack key characteristics of traditional money, such as stability and universal acceptance.
The Bank is monitoring crypto developments closely and has introduced the Virtual Assets Bill to create a legal framework for cryptocurrencies. This bill aims to prevent money laundering and other illegal activities while making crypto services more transparent.
With the Non-Bank Financial Institutions Regulatory Authority tasked with overseeing crypto businesses, Botswana is taking important steps to regulate the sector and embrace financial innovation.
In addition to addressing cryptocurrencies, Botswana has made significant strides in its digital economy by investing heavily in projects aimed at improving governance, public services, and economic growth. One of the most prominent initiatives is the “SmartBots” strategy, which focuses on transforming the country into a knowledge-based economy.
This program includes extensive digital infrastructure projects like the rollout of a 12,000-kilometer fiber optic network and the village connectivity program, which aims to connect 500 villages to the internet by 2025. Over half of the country’s schools have been connected to the internet through partnerships like UNICEF and ITU’s GIGA initiative, enhancing access to education.
In the public sector, Botswana has allocated over $11.8 million to digitize 400 government services, with 170 services already available online. These include applications for national identity cards and licenses, making essential services more accessible.
The government also introduced an online performance dashboard in collaboration with the United Nations Economic Commission for Africa to track progress in real-time.
Rise of the digital economy in Africa
Across Africa, cryptocurrencies are becoming increasingly popular, particularly in countries like Nigeria and South Africa. Nigeria ranks as one of the world’s top countries for crypto usage, driven by inflation, limited access to traditional banking, and the growing demand for international transactions.
In 2023, the Central Bank of Nigeria reported millions of eNaira wallets being used for transactions, demonstrating how crypto can promote financial inclusion.
South Africa has also seen a significant rise in adoption, with many businesses now accepting cryptocurrencies as payment. The South African Reserve Bank is exploring regulations to balance innovation with consumer protection.
Additionally, the country is a hub for blockchain startups, such as Revix and VALR, which are creating crypto-based investment and trading platforms.
A Kenyan labor organization, the Kenya National Fire Brigades Association (KENFIBA), has also made history by incorporating Bitcoin into its financial management strategy. This move positions KENFIBA as the first labor union in Kenya, and possibly in Africa, to hold Bitcoin as part of its balance sheet.
This initiative, supported by Proof of Workforce, a nonprofit advocating for Bitcoin adoption in worker organizations, aims to optimize KENFIBA’s operations, enhance firefighting capacities, and provide members with educational resources about Bitcoin management.
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