Cryptocurrencies Are Not Legal Tender, Says Central Bank of Samoa

News, Regulation | September 6, 2018 By:

The Central Bank of Samoa (CBS) has warned investors that cryptocurrencies are not recognized as legal tender in the country and should be considered “very risky and speculative in nature.”

In a statement, the central bank said since cryptocurrencies have no legal status as currencies, investors should be aware of the risks that they are taking before investing.

“People who invest in any of the cryptocurrencies do so at their own risk,” CBS said. “There is no guarantee that cryptocurrencies will be accepted as a medium of exchange, or will hold their value. The Central Bank does not currently endorse unregulated cryptocurrencies like bitcoin, Onecoin or any cryptocurrency that has been promoted in Samoa. Therefore, the Central bank does not encourage anyone to invest in any of them.”

The central bank has also warned that individuals who promote cryptocurrencies in Samoa will be held to the same standards as dealers of other financial instruments.

“The Central Bank also wishes to inform that any person who wishes to promote cryptocurrency or digital currency is considered under the Money Laundering prevention Amendment Act 2018 as a Financial Institution,” the central bank said. “This means it must have a valid business license issued in Samoa and is required to follow the Central Bank’s reporting requirements for Financial Institutions.”

Earlier this year, CBS issued a directive to all financial institutions to block foreign exchange transactions related to Onecoin. At the time, CBS said that despite warnings that there was a very high risk that Onecoin was a pyramid scheme, there were still a large number of people wanting to remit or transfer money out of Samoa to invest in the cryptocurrency. The central bank said that the directive was designed to not only protect Samoan investors but to ensure the protection of Samoa’s foreign currency reserves.