The Reserve Bank of Malawi (RBM) has joined the list of countries to warn citizens about the potential pitfalls of investing in cryptocurrency and related schemes according to a report by a local news source, NyasaTimes.
The warning was reportedly in the form of a statement released on Monday by RBM Governor Dalitso Kabambe in response to the growing public interest in the new asset class.
As one would expect, the Central Bank Chief stated that cryptocurrencies are not a legal tender in the country and should not be used in a manner that it is a replacement to the local currency, Kwacha.
On the matter of investing, Kabambe focused on the risks that citizens could face by investing in cryptocurrencies. He prominently cited money laundering, security breaches, hacks, and fraudulent activities as the dangers that people who decide to invest in the industry must be wary of.
Going further, Kabambe acknowledged that neither his agency, the RBM or any other agency oversees crypto-trading or investment activities in Malawi. The lack of regulation, according to him, means that citizens run the risk of not getting any legal consumer recourse if they lose their crypto investments.
“Users risk losing their money since no regulatory protection exists that would compensate them should the cryptocurrency scheme fail,” Kabambe reportedly said in the statement.
He also highlighted the fact that most cryptocurrency investment platforms exist outside Malawi, thus, increasing the chances of investors losing money. It will be difficult to “pursue perpetrators in the event of fraud or other forms of malpractices” the top official warned.
In stark contrast to Malawi’s latest warning regarding crypto investments, we revealed in an earlier report regarding the state of crypto regulation in Africa, that Ghana is considering regulations while South Africa is already reviewing proposed rules for the industry.
The South Africa Reserve Bank (SARB) last week even talked up the possibility of issuing a central bank backed digital currency.