Botswana Central Bank: Crypto Market Risks ‘Limited’ but Calls for Stronger Regulation

the Bank of Botswana has released its "Financial Stability Report", which points out that the risk to financial stability is "limited" due to the immature development of the local cryptocurrency market. However, the central bank emphasizes the need to establish a regulatory framework to prevent potential future risks, and lists the use of digital payment tools for money laundering and terrorist financing as one of the five national security risks. The report shows that although the increasing interconnectivity between the cryptocurrency market and the traditional financial system may bring systemic risks, the current risks are controllable due to the relatively simple local virtual asset market in Botswana. The central bank calls on cryptocurrency service providers to comply with regulatory requirements such as anti-money laundering (AML) and counter-terrorism financing (CFT), and recommends combating illegal activities through market monitoring and law enforcement cooperation.