Investment in cryptocurrencies such as Bitcoin and Tether will not be entertained by the Reserve Bank of Fiji (RBF), at least in the foreseeable future.
This despite their growing popularity in the major markets, where major banks, investment institutions and mum and dads are taking it seriously in addition to shares, bond, gold and other traditional asset forms.
“While we note that cryptocurrencies provide an additional investment opportunity for some international markets, there remain considerable risks associated with such investments,” RBF governor Ariff Ali told this newspaper.
“For Fiji residents, all offshore investments are currently prohibited under the Exchange Control Act, therefore, acquiring cryptocurrencies offshore using Fiji currency through the use of Debit and Credit Cards or bank transfers is a breach of the policy guidelines.
“Fiji residents are cautioned from holding and trading in cryptocurrencies as there is lack of regulations to protect investors when dealing with such assets.
“Since cryptocurrencies are self-governed, there are no processes for compensation should an investor face losses. In addition, there is price volatility, which can result in significant losses for investors,” Mr Ali said.
RBF joins most central banks around the world in banning cryptocurrencies, given the ability of the blockchain technology, the basic building blocks of cryptocurrencies, to bypass central bank controls.
“One of the primary objectives of RBF is to hold adequate levels of foreign reserves,” he said.
“In order to safeguard foreign reserves, there are restrictions placed on individuals from investing in any type of assets abroad, including crypto assets.”
He said it was important to note that legal tender is used to acquire cryptocurrencies using debit and credit cards.
“The uncertainty due to the lack of regulations surrounding cryptocurrencies means that there is limited centralised data or information on the volume and value of crypto investments.
“In our assessment, if investments in crypto assets are allowed, the RBF could lose a considerable amount of its foreign exchange holdings in a short time,” he said.
