RBM to set up Cryptocurrency unit

Dalitso Kabambe, RBM governor

This year's Reserve Bank of Malawi (RBM) Monetary Policy conference focusing on Cryptocurrency was quite a heated affair.

Arguments and counter arguments flew across the Nkhwazi (Eagle) room at Sunbird Nkopola over whether or not to accept Cryptocurrencies as legal tender.

It appeared that representatives of commercial banks had opted to exercise caution while those looking at the issue through technological lenses wanted Malawi to act decisively on the matter or risk being left behind.

The tech experts and those who have actually taken the risk of investing in Cryptocurrency in particular Bitcoin also argued that the end of financial services sector as we know them had arrived as people are now increasingly by-passing formal banking services to invest in a market not regulated by a third party.

They added, central and commercial banks are merely trying to remain relevant by hanging on to a thread in a world that has rejected them.

But in response, Thomson Mpinganjira of FDH bank, himself a serial investor said he and his bank would not be taking the risk of investing blindly intro Cryptocurrencies and he was sure neither would the other commercial banks.

He also argued that similar sentiments had been expressed when mobile money came onto the scene but the banks still stand.

“When there’s change, the key thing to look at is regulation. Is the change regulated or not. In this case Cryptocurrencies are not regulated yet, that’s why we you are seeing there are a lot of people holding back until the Reserve Bank comes in to start regulating. We’ve seen the examples of theft and fraud because it’s not well regulated.

"As an individual and an investor have I; or will I; or my companies be taking up Cryptocurrency; my answer is no. We will not risk people's money until this issue of regulation and trust is resolved. Let those who are in a hurry make money. At a point when prominent investors sign off, we will also sign off,” he said.

He added that more ground work needed to be done before commercial banks can embrace block chain technologies.

In quelling the arguments, RBM governor Dalitso Kabambe whose bank has spent the past one and half years commissioning research into the phenomenon said the discussions had shown that a lot more research and information sharing needed to be done before Malawi can take a position on the new mode of transacting.

"Reserve Bank of South Africa is going on a curve of learning. Reserve Bank of Malawi is taking up a cautious approach of consulting first, we have consulted. [Next up is] setting up team and a unit that begins to analyse and look more deeply into this subject, that we will do. The outcome, I'll be able to give feedback at the next conference, next year," he said.

And with that the conference was concluded.