Local crypto-currency traders and experts have warned that the central bank’s strong stance to block the trade in cryptocurrencies may after all be short-sighted as South Africa, the country’s largest trading partner, is set to introduce its first ever cryptocurrency ATM end of this week.
The ATM will be able to process digital currencies such as Bitcoin, Ethereum, Dash and others and is said to be opened at Northwold Spar in Johannesburg
Says Cirrus Capital’s senior analyst Dylan van Wyk, “Although being around for nearly a decade, cryptocurrencies are still in their infancy. As with many new technologies, there is a lot of creative new ways to use them and a lot of trial and error is required to figure out their best applications. Generally, a laissez faire attitude allows for this innovation to occur.”
Van Wyk further assumes that in the event that global adoption does occur, Namibia will definitely be a step behind.
“At the end of the day, people who want to own, trade and invest in these types of assets will do so with or without the consent of the central bank. By denying local crypto infrastructure development, such as ATMs and exchanges, could ironically force more people to make use of unregulated and non-transparent markets,” he warns.
Although Zimbabwe has reportedly banned the trade in digital money by its banks, IJG Securities analyst Eric van Zyl stamped that it is here to stay.
With an economy bogged in a crippling cash crisis that has tipped opposition political forces against the ruling Zanu PF party with the majority of people caught in between, many in that country have resorted to digital money.
Says the analyst, “It does pose various regulatory challenges though and thus central banks, including BoN, will need to proactively work on regulation. I do understand the BoN’s stance at present as cryptocurrencies could enable money laundering etc.”
“However, they also offer various benefits to consumers such as speed of transacting and much reduced transaction costs. Cryptocurrencies could for example allow one to send money to one’s family or friends almost immediately without incurring bank charges.”
“Removing these inefficiencies would be especially beneficial to the less well off in our society. There are thus advantages to cryptocurrencies that are worth taking advantage of,” he expounds.
Van Zyl is quick to point that on the other hand, cryptocurrencies circumvent exchange controls and could lead to an unregulated flow of funds out of the country which would put pressure on Namibia’s external position.
“This is the primary challenge for our central bank to overcome with regard to regulation I think. If this can be achieved I think that Namibians could benefit from the use of cryptocurrencies,” he adds.