CBBH: Cryptocurrencies should be viewed as a financial instrument, not as money

CBBH: Cryptocurrencies should be viewed as a financial instrument, not as money

SARAJEVO, April 17 (FENA) – The current position of the Central Bank of BiH (CBBH) is that cryptocurrencies should be viewed as an asset, a financial instrument, and not as money, the CBBH told FENA.

They explain that, in accordance with the Law on the Central Bank of BiH, the only legal tender in BiH is the convertible mark (KM) and that it is impossible to exchange cryptocurrency for KM, and that only other official currencies can be exchanged in KM.

Also, it was specified that cryptocurrencies are not regulated by law in Bosnia and Herzegovina, and that they do not function as a typical currency but rely on a computer-to-computer-based network protocol.

The CBBH adds that the management of transactions and issuance of money is done collectively by the network, and the supply of this “currency” is regulated by a contract between users and mainly operates outside state regulatory institutions, while the value is determined by supply and demand.

“All transactions with cryptocurrencies are performed through a virtual unregulated network. In some countries, there are also ATMs for buying / selling only cryptocurrencies for local currency, but they do not exist in Bosnia and Herzegovina,” stated the CBBH.

They point out that the term currency cannot be used for forms that in certain jobs or situations serve as a measure of value in the provision or exchange of goods or services, because they do not have all the elements of currency.

The CBBH emphasizes that the financial sector is moving towards significant changes as digitalization is rapidly changing the appearance of the financial industry, as well as that there is extensive literature on the subject but without agreement on the final outcome for central banks.

The CBBH’s approach to this is to carefully approach the adoption or amendment of regulations related to these issues.