Botswana’s central bank calls for crypto regulations

The bank stresses the need for regulatory frameworks to manage risks and highlights concerns about misconduct and security risks associated with digital payment instruments, particularly regarding money laundering and terrorist financing.
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Botswana’s central bank has stated that while the country’s local crypto markets are still underdeveloped, they pose minimal risks to financial stability. However, the bank cautioned that as crypto becomes more interconnected with the broader financial system, it may present future systemic risks. The bank emphasised the need for regulatory frameworks to address potential risks as the sector evolves.

While the risks from crypto assets are currently low, the Bank of Botswana acknowledged ongoing concerns about misconduct in the sector. To safeguard the financial system, regulators must develop oversight mechanisms to prepare for future growth in digital assets.

The central bank also flagged digital payment instruments as a significant security risk, particularly in relation to money laundering and terrorist financing. The anonymity offered by these platforms increases the potential for illicit financial activities, prompting the need for enhanced market surveillance and cooperation with law enforcement.