Even though cyber tokens and cryptocurrencies are usually used to depict digital currencies, the South African Reserve Bank, which is the central bank of the Republic, has refused to refer to digital currencies as cryptocurrencies and have used the term cyber tokens instead.
According to the South African Reserve Bank, digital currencies cannot be termed as currency since they do not meet money requirements, as per Bloomberg. Francois Groepe, Reserve Bank Deputy Governor explained the reason behind the bank’s stance on cryptocurrencies and cyber tokens.
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 Bank has reportedly set up a fintech task force in order to review its stance on private cryptocurrencies. This will help them come up with a good and regulatory system and relevant policy framework.
Banks Skeptical about Cryptocurrencies, Cyber Tokens
All central banks across the globe are skeptical about the long term future of cryptocurrencies and are not extremely approving of this digital currency. Bank of England Governor Mark Carney, in February declared that Bitcoin cannot be termed a legitimate currency since it is not a store of value nor is it a means of exchange.
Similarly, the Reserve Bank of Zimbabwe (RBZ), earlier this month issued a circular to all financial institutions to stop dealing with cryptocurrency and asked them to begin liquidating existing crypto-related accounts.
The Reserve Bank of India in April issued a circular like RBZ, directing all banks and financial institutions to stop dealing and exchanging services in cryptocurrency. The Indian Supreme Court later stayed the bank’s ruling until the final hearing in July. However, India seems to be moving closer to legalizing cryptocurrency and crypto tokens as there are talks that the government might legalize it with an 18 percent Goods and Services Tax (GST).[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]