Lesotho shuns cryptocurrencies

 Lesotho shuns cryptocurrencies

Lesotho shuns cryptocurrencies.

Spread the love

Maseru, Lesotho – The Central Bank of Lesotho (CBL) has continued with its efforts of shunning cryptocurrencies.

In a statement this week, the CBL said cryptocurrencies were neither legal tender in Lesotho nor in any other country.

The bank said that by virtue of being offered as financial investment opportunities to the public, cryptocurrencies leave their promoters liable to violation of the constitution.

“As a follow-up to our previous statement which was issued in November 2017, we wish to remind members of the public including the media that other foreign currencies in the country are traded by institutions duly licensed by the Central Bank of Lesotho,” reads the CBL’s statement.

“These are currencies issued by authorised monetary authorities and enjoy legal tender status in their countries.

“Status as a (foreign) currency Cryptocurrencies, however, do not fall in any of the aforementioned categories – (1) being a legal tender in Lesotho issued by the Central Bank of Lesotho and (2) being a currency issued by another country and traded by the licensed institutions in Lesotho.

“Status as an investment asset/security Members of the public are hereby warned that, by virtue of being offered as (financial) investment opportunities to the public, cryptocurrencies directly expose their promoters to violation of Sections 27 and 28 of the Central Bank of Lesotho Capital Market Regulations of 2014 that require investment advisers to be licensed by the Central Bank of Lesotho.

“While the CBL and other institutions in the international financial regulation space, acknowledge innovation and adoption of new technologies in the financial industry thus viewing these initiatives as beneficial to the industry and its users if deployed in a manner that sufficiently safeguards the interests of the users, this statement wishes to reiterate the message which was conveyed in our previous communication warning members of the public on the emerging and growing promotion of cryptocurrencies in Lesotho that:

  • “The Central Bank of Lesotho is the legislated sole issuer and redeemer of currency in Lesotho. • Cryptocurrencies do not fall under the purview of the regulatory scope of the Central Bank of Lesotho and as such there shall be no recourse to the Bank in the event of losses. As such the members of the public are warned to be cautious.”

In other words, the bank said, due to the nature of cryptocurrency transactions that do not require any disclosures, the public is warned that their promotion and or participation in virtual currencies may lead to violations of existing tax laws, exchange control laws and anti-money laundering/combating of terrorist financing laws which are prosecutable transgressions.

While cryptocurrency activities are generally few in Lesotho, locals have for a long time participated in such trading initiatives across the border, in South Africa. Nevertheless, the CBL has continuously warned participants of losses in such activities.

The bank’s warnings have in the past received credence after several investors lost money to pyramid schemes that offer “get rich quick” initiatives.

Silence Charumbira

Silence Charumbira is a journalist based in Maseru, Lesotho. He has vast experience having trained and worked in Harare for both state-owned and private media. He freelances for several international and regional papers among them The Guardian. View reputable reputation at The Guardian. He has interests in climate change reporting as well as illicit financial flows reporting with a thrust on how these phenomena affect people’s daily lives. He loves traveling, photography, reading, and writing.

Related post