The Republic of Burundi, a landlocked African nation, banned all cryptocurrencies within its borders.
According to a statement made by the Bank of the Republic of Burundi, the country’s central bank, the measure was taken as an act of consumer protection.
“These virtual currencies are traded on unregulated online platforms around the world, and their values are highly volatile, resulting in speculative transactions that expose the users of these currencies to potential losses without no possibility of legal recourse in the event of a collapse of their value or in case of closure of these cryptocurrency exchange platform,” the government wrote in a statement.
Because cryptocurrencies are not issued by any central authority, digital assets cannot act as “legal tender.” The general public is directed to “exercise caution” and only make financial transactions through “institutions duly authorized by the Central Bank.”
Included in the ban are remittances made in cryptocurrencies. According to the World Bank, personal remittances received in Burundi represented 1.2 percent of the nation’s gross domestic product in 2018.
A senior official at the central bank told Bloomberg some Burundi citizens approached the government after losing money while trading cryptocurrencies. As a recourse, Alfred Nyobewumusi, director of the bank’s micro-finance division said crypto trading was banned outright in the country.
Nyobewumusi further stated, “strong measures” will be taken against those that do not follow the law.
It has not been disclosed how many people lost their investments, in what currencies, or on what exchanges. The central bank did not respond to a request for comment by press time.
Burundi is not the first African nation to take steps against cryptocurrencies. In 2017, both Nigeria and Zimbabwe officials announced they would scrutinize the emergent asset class and the blockchain technology that undergirds them.
Burundi flag photo via Shutterstock