According to reports published by a local news source, NyasaTimes, The Reserve Bank of Malawi (RBM) has joined the list of countries to have issued warnings to the citizens about the potential pitfalls of investing in cryptocurrency and related schemes. The said warning was released in the form of a statement, which is in response to the growing public interest regarding digital assets, was released on Monday by the Governor of RBM, Dalitso Kabambe.
As can be expected, the Central Bank Chief stated that cryptocurrencies are not legal tenders in the country and thus should not be used as a replacement for the local currency, Kwacha. Kabambe elaborated on the issue of investing and said that there were a number of risks associated with investing in digital assets. He prominently cited money laundering, security breaches, hacks, and fraudulent activities as only a few of the dangers that people who decide to invest in the industry must be wary of.
Moreover,he also acknowledged that there were no local agencies that oversaw crypto-trading or investment activities in Malawi. This lack of regulation, according to him, means that citizens are at 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 emphasised on the fact that most cryptocurrency investment platforms are not local to Malawi, which in turn increases the chances of investors losing money as 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, Ghana, another country in the continent of Africa is considering regulations while South Africa is already reviewing proposed rules for the industry.