This article is about blockchain, business and technology news. Here is the summary:
The Reserve Bank of Botswana has stated that the country’s local crypto markets are not yet developed and therefore pose minimal risks to financial stability. However, it stressed that regulations are needed to prevent future digital asset risks.
The central bank said that the increasing interconnection of the crypto market with the financial system presents potential systemic risks. These risks could lead to a cascading failure due to the interconnections in the financial system.
It was noted that although crypto assets currently pose minimal risks to Botswana’s financial stability, regulators need to be prepared for future risks. The bank said that local virtual asset markets are still developing and therefore pose limited financial stability risks.
The central bank also added that the risks from financial technology are also minimal, but could increase as technological innovations penetrate the local markets.
Finally, the bank noted that digital payment instruments can be used for money laundering and terrorist financing, which is one of the five major national security risks posed by the financial sector. To mitigate these risks, he stressed that regulators should ensure that virtual asset service providers, such as crypto exchanges, comply with Anti-Money Laundering and Countering the Financing of Terrorism regulations.
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