Keep Bitcoin Away From South Africa's Strategic Reserve: Helen Zille

Zille was speaking at a cryptocurrency conference, called Adopting Bitcoin , held recently in Cape Town. She said she invests in crypto personally - and every 'spare penny" she has goes into crypto investments not her main savings. She is, however, far more cautious about the cryptocurrency being used as a reserve currency, an idea that has gained favour in the US following the election of Donald Trump as president.

Zille admitted that the adoption of bitcoin as a strategic reserve currency had helped El Salvador reduce its debt significantly - bitcoin has more than doubled in value since the Latin American country invested in the cryptocurrency. One of the key objectives was to de-risk El Salvador's finances by reducing its dependence on the US dollar.

Zille described the steps taken by El Salvador as "important experiments" but warned that there are many risk factors South Africa's financial regulators must consider before thinking about making a similar move here.

The South African Reserve Bank defines its strategic reserves as a "collection of assets that are managed to help the country prepare for economic crises, natural disaster and conflict". These assets include gold, foreign exchange, 'special drawing rights" and forex deposits.

Also citing the El Salvador example, Manyi urged the South African government to invest 5 of its strategic reserves in bitcoin, claiming that this amount, of some R50-billion by his estimation, could grow to R380-billion in five years - assuming bitcoin's growth in the past continues on a similar trajectory.