They don’t meet the requirements to be classified as money.
South Africa’s central bank chooses to call digital currencies such as Bitcoin “cyber-tokens” because they don’t meet the requirements to be classified as money.
“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,” Reserve Bank Deputy Governor Francois Groepe told reporters in Pretoria on Thursday. “We prefer to use the word ‘cyber-token’.”
Digital currencies such as Bitcoin and Ethereum are becoming increasingly popular, with regulators in some countries struggling to move fast enough to manage them. The Reserve Bank has established a FinTech unit to review its position on private cryptocurrencies and to help draw up an appropriate policy framework and regulatory regime.
“We want to ensure or establish whether there is still compliance with the relevant financial surveillance or exchange-control regulations,” Groepe said.
The South African Reserve Bank isn’t the first to voice reservations about digital currencies. In January, Nigerian Governor Godwin Emefiele said investing in Bitcoin is a “ gamble,” while Lesotho’s central bank said a month later that it won’t offer any recourse to investors who lose money on them. Bank for International Settlements General Manager Agustin Carstens said in an interview with the German newspaper Boersen-Zeitung this week he prefers to call these currencies “cryptoassets.