Bloomberg reported on May 24th that the South African Reserve Bank, the central bank of the republic, has opted to call all types of digital securities “cyber-tokens” because they don’t meet the requirements of money.
Deputy Governor of the Reserve Bank Francois Groepe explained why they took this position:
“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’.”
The Reserve Bank recently set up a fintech task force to review the bank’s stand on private cryptocurrencies and help address regulatory issues and help develop a policy framework and regulatory system. Grope said:
“We want to ensure or establish whether there is still compliance with the relevant financial surveillance or exchange-control regulations.”
Central Banks tend to approach cryptocurrencies with varying degrees of skepticism or disapproval. For example, Bank of England’s Mark Carney said Bitcoin cannot be considered a legitimate currency because of its failure to meet two major requirements of a traditional currency. He also claimed that Bitcoin is neither a means of exchange nor a store of value.
Meanwhile, earlier this month, the Reserve Bank of Zimbabwe ordered all financial institutions to stop servicing crypto exchanges and also ordered the liquidation of existing crypto-related accounts.
While April of this year saw the Reserve Bank of India announced that they would cease services to any individuals attached to crypto. The Indian Supreme Court upheld the decision of the bank against an injunction request and will hear arguments on the ban this coming July.