Fiji’s Central Bank Warns Against Crypto Use, Dashing Bitcoin Hopes

The Reserve Bank of Fiji (RBF) has issued a warning to the public against using cryptocurrency for payment or investment, a reversal of the Fijian prime minister’s perceived position on crypto. This move is a blow to those who had hoped that Fiji would follow in the footsteps of other Pacific Island nations in adopting Bitcoin.

“The Governor of the RBF, Mr Ariff Ali acknowledges that there are indications of persons or entities promoting cryptocurrency investment schemes in Fiji. These investment schemes are increasingly being promoted through various platforms including social media.”

The RBF has not licensed any person or entity to provide cryptocurrency investments or trade in virtual assets, it said. Fijian residents may even face criminal charges for investing in cryptocurrency abroad using “funds held in Fiji.”

Hopes were high for the adoption of Bitcoin (BTC) in Fiji after Sitiveni Rabuka, a long-time presence on Fiji’s political scene, became prime minister in December 2022. This was mainly due to the pronouncements of Tongan member of parliament and nobleman Mata’i’ulua ‘i Fonuamotu, Lord Fusitu’a, who labeled Rabuka “pro-Bitcoin” in an X (then Twitter) post shortly after Rabuka’s election. “Let’s go 2 for 2 - BTC Legal Tender Bills for the Pacific in 2023,” Fusitu’a posted.

Rabuka’s perceived stance on crypto sparked hope for Bitcoin adoption in Fiji

Lord Fusitu’a went on to explain that Rabuka “asked me to meet with him a number of times & show him step by step how Fiji can do bitcoin legal tender like Tonga.” A comment on Fusitu’a’s post noted that Rabuka had not made any public statements on the use of Bitcoin. “I don’t think he’s been asked about it,” Lord Fusitu’a replied.

The new statement from the RBF is in line with the advice of the International Monetary Fund (IMF) on cryptocurrency. The IMF released a paper on the use of digital money in Pacific Island countries in February, in which it called cryptocurrencies “poor substitutes for means of payment, and they carry additional macroeconomic risks.”

The RBF’s warning against crypto use is a setback for Bitcoin hopes in Fiji

The RBF’s warning is a significant blow to those who had hoped that Fiji would follow in the footsteps of other Pacific Island nations in adopting Bitcoin. As the IMF’s paper highlights, there are significant risks associated with the use of cryptocurrency, and it seems that Fiji is taking a cautious approach to its adoption.

Fiji’s decision may have implications for other Pacific Island nations considering crypto adoption

The RBF’s warning serves as a reminder that the adoption of cryptocurrency is not without its challenges. As the world continues to grapple with the implications of digital money, it remains to be seen how Fiji’s decision will impact the global crypto landscape.