No regulation for crypto-currency in PNG
The Bank of Papua New Guinea (BPNG) says while there is discussion abroad on a digital currency known as crypto-currency there is no policy to regulate this in the country.
In the absence of this framework it has cautioned members of the public to refrain promoting it for the sake of luring people to give money, be it individuals or organizations as this would amount to a form of scam.
The assistant Governor of the Bank of PNG Ellison Pidik was responding to questions put regarding the emergence in PNG of this digital currency and a reported growing interest among citizens, particularly in Port Moresby.
BPNG Governor Loi Bakani has not announced anything specific on crypto-currencies so with this is a private initiative and people must be wary.
Nothing has been developed connecting to any other benefits. At the moment there are discussions on this thing around the world particularly on block chain and Bitcoin but is driven by very reputable institutions, in PNG’s case the Central Bank, so that we are protecting people hoping to benefit from it.
“It has to be run and properly engineered by a government policy and because it involves the banking system it must involve the BPNG and all the banks not individuals,” Mr Pidik explained.
As explained by economist and director of the Institute of National Affairs (INA) Paul Barker, crypto-currencies are based upon a level of trust, instead of the banking system, including the central banks and the State.
Mr Barker says it promises, more on the faith in the advanced cryptography to make it very difficult to cheat, as no one really trusts each other using it.
The most well-known established crypto-currency is Bitcoin, which is meant to be very advanced and secure, but there are apparently hundreds of others in operation now.
“There are concerns by the Central banks etc. that crypto-currencies undermine monetary management and can be used for trafficking illegal items or money laundering, but clearly there’s a demand for transactions which are outside the government’s purview, and people with legal rights to transfer also sometimes favor the mechanism, including libertarian type people who object to the power and oversight of the States,” Mr Barker said.
He added they may be used prevalently where monetary management is poor, and currency markets ill-adjusted, and where there is also a thriving black market.
Bank South Pacific (BSP) Chief Executive Officer (CEO) Robin Fleming concurred to Mr Barker’s explanation.
The most common of those currencies is Bitcoin.
“As with any currency or investment if a user does not fully understand the underlying nature or underlying mechanisms of the crypto-currency or investment they should not deal in those crypto-currencies,” Mr Fleming said.