The National Bank of Rwanda (NBR) has told all of the country’s banks to stop doing anything with cryptocurrencies until a regulatory framework is established.
Soraya Hakuziyaremye, the acting governor of the NBR, wrote a letter to managing directors and CEOs of financial institutions to defend the organization’s work.
She said that because most crypto assets are not regulated, customers don’t have the “guarantees and safeguards” that come with regulated financial services. In its letter, the NRB talks about other times when scammers like Gerald Cotten of the Quadriga cryptocurrency exchange and Ruju Ignatova of Onecoin took money from cryptocurrency investors.
According to a report from the IMF in November, only 25% of sub-Saharan African countries have made rules about cryptocurrencies.
Six countries have outlawed cryptocurrency:Lesotho, Tanzania Cameroon, Ethiopia, Sierra Leone, and the Republic of Congo. The remaining two-thirds have placed some restrictions on it.
All banks in Zimbabwe have been told to stop handling cryptocurrency transactions, and a cryptocurrency company in Liberia has been told to stop doing business.
In the past, many African countries made buying or selling cryptocurrencies illegal.
NBR wants to protect users from the unstable cryptocurrency market.
The Central Bank of Rwanda thinks that people who buy cryptocurrencies are exposed to a market without “the protections and safeguards that come with regulated financial services.” So, financial institutions have been given limits to protect them from a possible collapse and keep them from actively participating in cryptocurrency transactions.
Rwanda has joined Zimbabwe and Nigeria on the list of African countries that don’t allow banks to handle cryptocurrency transactions.
As of the end of 2021, 23 African countries have banned using and selling of cryptocurrencies in their economies.