The largest bank in Papua New Guinea, Bank South Pacific (BSP), does not consider digital currencies worthy of being included in their suite of financial services. The CEO of BSP recently highlighted too many risks in cryptos, adding that the country authorities also warned against the use of digital currencies.
BSP cites risks in cryptocurrencies
On Tuesday, the CEO Bank South Pacific, Robin Fleming, revealed in an interview with The National that they hold no interest in digital currencies. According to Fleming, BSP does not accept cryptocurrency transactions, as they tend to pose certain risks, one of which has to do with the interest and protection of consumers.
The CEO explained that most traditional financial products would have protective measures in place for the customers. However, this is never the case with Bitcoin and other cryptocurrencies, given that no intermediary will possibly limit how customers lose their funds if their cryptocurrency happens to get locked out or stolen.
For instance, the CEO compared cryptocurrencies with credit cards, saying that the latter ensure consumer protection against fraud through chargebacks functions. Moving forward, Fleming also pointed out volatility as part of the risks in crypto. He explained that cryptocurrencies are ten times volatile compared to the traditional foreign exchange markets.
BSP: cryptos are pseudonymous, not anonymous
The CEO of BSP explained:
“BSP does not accept cryptocurrency transactions as they are pseudonymous rather than anonymous in that the cryptocurrency within a wallet is not tied to people, but rather to one or more specific keys (or ‘addresses’). Thereby, cryptocurrency owners are not identifiable, but all transactions are publicly available in the blockchain.”
Having cited these risks in cryptocurrencies, Fleming went on to say that the country is unlikely to allow the use of digital currencies. He mentioned that the Bank of PNG published a warning to the residents that “cryptocurrencies are not currencies issued or regulated by the Central bank.”