Botswana’s Central Bank Warns of Risks Associated with Crypto Assets

Gaborone, Botswana - November 10

The Bank of Botswana has issued a warning to residents and businesses in the country about the risks associated with crypto assets, particularly Bitcoin. In a statement released on November 10, the central bank highlighted the inherent dangers of trading in digital currencies, including complete loss of value and potential abuse by unscrupulous individuals.

The Risks Associated with Crypto Assets

• Complete loss of value: The Bank of Botswana warns that investing in crypto assets can result in a complete loss of value.
• Abuse by unscrupulous individuals: There is a risk of participating in pyramid schemes and scams related to crypto assets, which could lead to significant financial losses and exposure to prosecution.
• Lack of regulation: Currently, there is no specific legal or regulatory framework governing investment in crypto assets such as Bitcoin in Botswana.

Why Crypto Assets are Not Reliable Means of Payment

The central bank has clarified that crypto assets do not exhibit the fundamental characteristics of money or currency, including:

• Being a stable store of value
• Unit of account
• Medium of exchange

Moreover, they are not backed by any government or central bank, making them unreliable means of payment.

Advice from the Bank of Botswana

The Bank of Botswana has advised residents and businesses to exercise caution when considering investment in crypto assets. The public is also reminded that there is no recourse to the central bank for redress pertaining to fraud, misconduct, or financial losses emanating from participation in the crypto assets business.

Ongoing Monitoring by the Central Bank

The statement by the Bank of Botswana comes as part of its ongoing monitoring of developments in the crypto assets space and its potential impact on the broader financial sector of the country.