The Reserve Bank of Malawi has said that cryptocurrencies are not legal tender in Malawi and should not be used as a substitute to the Malawian Kwacha.
In a statement, Dr. Dalisto Kabambe, Governor, Reserve Bank of Malawi (RBM), said:
“The Reserve Bank of Malawi wishes to advise the general public that cryptocurrencies are not legal tender in Malawi. The RBM is however aware that they are used as a means of payment or medium of exchange, store of value, or invested assets online.”
The governor said that the RBM has noted with concern the increased public interest in cryptocurrencies observed through the increasing number of inquiries on the subject both from the general public and industry stakeholders.
Dr. Dalisto noted that the neither the Central Bank of Malawi, nor any other public institution in the country has oversight responsibility over cryptocurrency trade and systems in the country. As a result, any cryptocurrency-related activities such as trading and usage are performed at own individual risks since there are no legal recourse channels at the moment.
The governor further noted:
“RBM bears the exclusive mandate to issue legal tender, thus, bank notes and coins in Malawi, and to date, has not issued any form of cryptocurrency. The general public is encouraged to fully understand and be aware of the risks associated with the use of cryptocurrencies and similar online trading schemes.”
Kabambe cautioned the Malawian public to exercise restraint when engaging with cryptocurrencies due to their unregulated nature. He warned that RBM does not and will not recognize foreign investment in cryptocurrencies.
Speaking on local exchanges, Kabambe noted:
“So far, there is no cryptocurrency exchange known to have been registered in Malawi, notwithstanding any trading by its citizenry or local entities on the foreign-based exchanges. These factors present another risk dimension as it would make it particularly difficult to pursue perpetrators in the event of fraud or other forms of malpractices that may be encountered by users in Malawi.
Members of the public should therefore guard against being exploited by ambigous and unscrupulous schemes, and are further urged to deal with financial service providers licensed by the RBM, whcih is the sole regulatory authority for financial services in Malawi.”
The governor however, was quick to point out the value of the underlying blockchain technology saying:
“The RBM wishes to acknowledge that it is aware that the underlying cryptocurrency concept is blockchain technology, which has proved to be so versatile that it has found beneficial application in various other areas of commercial activity in the business world.
The RBM wishes to assure the general public that it will continue to monitor domestic, regional, and global developments regarding the subject matter and reserves the right to review its position regarding any regulatory intervention it may feel necessary to apply.”