South Sudan central bank warns citizens against use of bitcoin

JUBA – South Sudan’s Central Bank on Thursday warned the public against the use of virtual currencies, particularly bitcoin, saying they are not legal tender.

Johny Ohisa Damian, Governor of the Bank of South Sudan said investing in virtual currencies carries high risks of devaluation as users could be hit by severe fluctuation and volatility of its value.

“Virtual currencies tend to be volatile and their value can fluctuate significantly. The high volatility of virtual currencies makes them unsuitable for most investors especially those investing for long-term goals,” Ohisa said in a statement issued on Thursday.

Ohisa issued a statement prohibiting citizens from dealing with virtual currencies, particularly bitcoins saying they don’t have legal status in the country.

“Virtual currencies such as Bitcoin are a digital representation of the value that can be digitally traded and functions as a medium of exchange within a specified online community but does not have legal status in South Sudan,” said Ohisa.

He said the bank has been following the issue of bitcoin very closely, adding it was important to warn the public against it in order to avoid any fraud problems in the future.

“Transactions involving virtual currencies are subjected to a high degree of anonymity, as such; there is the potential for misuse of virtual currency to conduct criminal activity including money laundering or terrorism financing,” he said.

The Central Bank Chief disclosed that Bitcoin is affiliated with no country or bank, adding that It is based on an open-source computer code designed by an anonymous person.

“Providers of virtual currencies in South Sudan are neither regulated nor supervised by the Bank of South Sudan and there is currently no legislative provision under the Bank’s purview that provides protection to customers for losses arising from the use of virtual currencies.”

“In addition, unregulated virtual currencies companies may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions,” he said.