Regulation Round-Up: Central Banks in Kenya, Swaziland & Australia Have Their Say

The Central Banks of Kenya and Swaziland have recently made statements pertaining to cryptocurrencies, with Kenya’s central bank indicating that the nation’s financial regulatory bodies will meet at the start of next year to discuss cryptocurrency regulations, and Swaziland’s central bank stating that it does not wish to inhibit innovation in the nascent industry. In other central bank news, the Reserve Bank of Australia (RBA) has addressed cryptocurrencies during a recent parliamentary committee testimony on taxation.

Also Read: Vietnam’s Central Bank Seeks to Ban Bitcoin Activities

Kenyan Regulators Will Meet to Discuss Cryptocurrencies Early Next Year

Last month, Kenya announced the Central Bank of Kenya and the Capital Markets Authority are planning to meet in early 2018 to discuss fintech regulations – including those pertaining to cryptocurrencies. Regulatory policy and strategy director at Kenya’s Capital Markets Authority, Luke Ombara, stated “the joint financial specter regulators forum intends to meet in the first quarter of 2018 to review oversight of fintech solutions from a holistic perspective that cover all the five subsectors in the financial market – banking, insurance, capital markets, pensions and Saccos.”

Kenyan media outlet, The Star, reported that Mr. Ombara also indicated that “under banking, [Kenyan regulators] will review the cryptocurrencies and distributed ledger technology.”

Majozi Sithole, Governor of the Central Bank of Swaziland (CBS), has advanced a cautious position with regards to cryptocurrencies. Whilst speaking during the recent Swaziland Economic Conference 2017, Governor Sithole expressed the CBS’s desire not to stand in the way of innovation, however, emphasized the risks that cryptocurrency trading may present to retail investors. “It may not be wise to dismiss virtual currencies and as the CBS we are learning and we want to accept and support innovation. If this is innovation, we do not want to stifle it. We want to learn more about it… We are aware that people are trading on these platforms and we want to caution people to be careful. This has become a topical issue globally and we are studying it and continually talking to experts on this issue”, the governor said.

Australia’s Central Bank Has Acknowledged That Attempting to Regulate “Core Protocols” Relating to Cryptocurrencies Is “Unlikely to Be Effective”

The Reserve Bank of Australia has addressed several regulatory challenges pertaining to cryptocurrency during a parliamentary committee testimony on “taxpayer engagement with the tax system.” The RBA stated that “[cryptocurrencies] and the broader area of distributed ledger technology is a topic that the Bank has been monitoring closely over recent years. Australia’s central bank concludes that “from the Bank’s payments policy mandate, digital currencies do not currently appear to raise any pressing regulatory issues,” however “their use may have some implications for tax authorities and they raise more significant issues for authorities tasked with crime prevention and detection.”

The RBA acknowledges that the fluidity of cryptocurrencies poses unique challenges to regulators, stating that “the distributed and cross-border nature of digital currencies like bitcoin means that regulation of the core protocols of these systems is unlikely to be effective.” Australia’s central bank. The RBA also stated that “distributed ledger and blockchain technologies… have potential for widespread use in the financial sector and many other parts of the economy.”

Do you feel that most states are moving toward permissive regulations with regard to cryptocurrencies? Share your thoughts in the comments section below!

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