Following the steps of many other public authorities around the world, the Mozambican central bank issued today a warning on the risks associated with the cryptocurrency known as “Bitcoin”. Banco de Moçambique (BdM) indeed observed the circulation of the decentralized, peer-to-peer-exchanged currency within national borders.
“Bitcoin is becoming ever more popular due the ease with which one can make transactions of large sums of money for the purchase of goods and services, fund transfers, investment and payments”, wrote BdM in a press release published earlier today. “Although there are obvious benefits, there are also important risks due to the very nature of such currency, as this can be associated with criminal activities”, said the central bank, citing money laundering, terrorism finance and drug trafficking as a result of the anonymity of this payment system.
The monetary institution urged on the importance for the public to be able to distinguish Bitcoin from what is commonly referred to as electronic currency. “Electronic currency is generally accepted as means of payment by other than the sole issuer and is convertible against other currencies on demand.” BdM added that the issuing of electronic currency is regulated by law in every country, including Mozambique, as a legal activity undertaken by financial institutions.
Thus, BdM wants to make sure to the public that the central bank “does not regulate, inspect or oversee any transactions based on Bitcoin”, that it will not take any responsibility for any prejudice that may arise from the use of Bitcoin, “given that this currency has no legal framework nor is issued by any central monetary authority”, concluding by a reminder that Bitcoin is an extremely volatile currency. At the same time, BdM assured that it remained “committed to support financial innovations, including those based on new technologies that help make the financial system more secure and efficient”.