Central Bank of Malawi Says Crypto Isn’t Legal Tender

Crypto activity in Africa is starting to boom, with many nations on the continent creating crypto regulations or actively encouraging adoption. However, the Central Bank of Malawi has hit out against cryptocurrencies, saying that they are not recognized as legal tender in the nation and do not represent a substitute to the Malawi kwacha (MWK). Despite this rather frosty stance towards crypto, it could play out as a rather useful approach for crypto investors.

A Possible Tax Dodge

Now, before we get into this, we don’t advocate dodging taxes and we encourage that each and every one of our readers does their best to track their crypto use and pay the correct amount of tax. The Central Bank of Malawi (RBM) followed up its statement by adding that the government is not planning to recognize cryptocurrencies as investments – a comment that came from RBM Governor Dalitso Kabambe. If the RBM and government isn’t going to recognize cryptocurrencies as investments, then the tax status of gains from crypto investing is rather cloudy – meaning you could probably get away with paying no tax. Again, we recommend you pay your taxes, but if you like to live life on the wild side, it might be a good time to move to Malawi.

No Crypto Exchanges in Malawi

In a bid to prevent its citizens from entering crypto markets, the government has avoided issuing any form of regulatory status to crypto exchanges, meaning that Malawians have to venture out onto the web to find an exchange that’s happy to onboard them as customers. That being said, banks could quickly track down who is using these exchanges and the government could block the website. This makes getting into crypto rather tough for Malawians, and is forcing them to use services such as LocalBitcoins or head out of country to create crypto portfolios – although it’s worth it for the generous tax status.

South Africa Leading the Way

When it comes to crypto on the African continent, South Africa is leading the way by a country mile. South Africa has already introduced VAT laws for crypto activity and has a number of huge exchanges opening up. Elsewhere in Africa, Kenya is looking at using blockchain technology to keep track of housing applications from low-income families. This is in a bid to cut out corruption and ensure the waiting list isn’t manipulated by illicit parties.

Malawi might be turning a blind eye to the crypto markets for now, but it’s only a matter of time before it’s forced to embrace them. By giving citizens access to the crypto world and implementing a rather generous tax status for crypto activity, Malawi could quickly become a haven for crypto traders. The potential is there, the country just needs to grab it by the horns and embrace it.

Comments (No)

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.