Cryptocurrencies are now taken seriously around the world, but only a small portion of governments are embracing this area. Even the United States has yet to enact clear cryptocurrency regulations. Unlike countries like China that adopt a strict stance, there are those like El Salvador that have tied their fate to cryptocurrency. In regions like the United States and Hong Kong, Bitcoin is now officially recognized as one of the investment instruments.
Legal Challenges for Crypto Investors
The Reserve Bank of Fiji (RBF) issued an announcement opposing the use of cryptocurrency for payment or investment. This announcement mentions that using “funds held in Fiji” to trade on foreign exchanges could lead to legal issues. Investors threatened with criminal charges face similar attitudes in less developed and developing countries.
Some countries forced to limit capital outflows have taken a stance against cryptocurrency multiple times. Remember the WazirX raids in India, which were fundamentally motivated by this. The desire to prevent uncontrolled outflows abroad is frustrating for investors.
The announcement states:
“RBF Chairman Mr. Ariff Ali acknowledges that there are indications of individuals or organizations in Fiji promoting cryptocurrency investment plans. These investment plans are increasingly being promoted through various platforms, including social media.”
Fiji and Cryptocurrencies
When current Prime Minister Sitiveni Rabuka took office in 2022, there was a sentiment that cryptocurrencies could breathe more easily in the region. This was due to posts about Bitcoin-backed funds. Rabuka later sought advice from experienced figures like those in Tonga regarding legalizing Bitcoin.
The new statement from the RBF aligns with the International Monetary Fund’s (IMF) advice on cryptocurrencies. Particularly, this attitude, which restricts less developed countries, is forcing many countries away from cryptocurrencies through the IMF. In February, the IMF published a report on the use of digital currencies in Pacific Island countries, discussing the risks of cryptocurrencies on fragile economies.
Bitcoin was trading at $63,800 at the time this article was prepared, and news of Israel’s imminent attack on Iran continues to dampen investors’ risk appetite.
