Eswatini

**Report: Retail Cryptocurrency Trading Status in Eswatini**

**Date:** April 13, 2025

**Prepared For:** Internal Review
**Prepared By:** Specialized Financial Regulatory Analyst

**Subject:** Assessment of the Regulatory Environment for Retail Cryptocurrency Trading in the Kingdom of Eswatini

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**Topic: Retail_Trading_Status**

**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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**1. Identified Status:**

**Allowed-UnRegulated**

**2. Detailed Narrative Explanation:**

The current status of retail cryptocurrency trading in the Kingdom of Eswatini is best described as **Allowed-UnRegulated**. While individual citizens and residents are not legally prohibited from buying, selling, or holding cryptocurrencies (often referred to as crypto-assets by the Central Bank), this activity occurs within a regulatory vacuum. There is currently no specific legislation or regulatory framework in Eswatini designed explicitly for cryptocurrencies or crypto-asset service providers.

The Central Bank of Eswatini (CBE) and the Financial Services Regulatory Authority (FSRA) have acknowledged the growing interest in crypto-assets within the country. However, instead of enacting specific regulations to govern the sector thus far, they have primarily issued public warnings concerning the associated risks. These warnings emphasize that cryptocurrencies are not legal tender in Eswatini and are highly volatile and speculative. Regulators stress that due to the lack of specific regulation, individuals engaging with crypto-assets do so entirely at their own risk, without the consumer protection or legal recourse typically associated with regulated financial products or services. There is no deposit insurance or compensation scheme covering losses from crypto-asset investments or platform failures.

Furthermore, the CBE has highlighted the risks of fraud, scams (including pyramid schemes), and the potential use of crypto-assets for illicit activities due to the absence of specific Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements imposed on crypto-asset platforms under Eswatini law. While general laws like the Data Protection Act of 2022 or the Computer Crime and Cyber Crime Act might tangentially apply to entities operating within Eswatini, there are no crypto-specific compliance mandates for exchanges or wallet providers targeting Eswatini residents.

Despite the lack of regulation and the associated warnings, the authorities have indicated an openness to innovation. The CBE has stated its intention not to stifle technological development and is actively researching crypto-assets and the broader fintech landscape. In 2023, the CBE, in collaboration with the FSRA, established a Crypto Assets Task Force (CATF) comprising experts in finance, law, and technology. The CATF's mandate is to conduct research, including understanding consumer behaviour through national surveys (one was commissioned via ESEPARC), and ultimately produce a national policy recommendations paper to guide potential future regulation. The goal is to foster responsible innovation while ensuring financial stability and consumer protection.

A national survey conducted in partnership with the Eswatini Economic Policy Analysis and Research Centre (ESEPARC), discussed in the CBE Governor's June 2024 Monetary Policy Statement, found relatively low direct engagement (8.6% of respondents) but significant exposure and interest, alongside limited understanding (48.4% limited comprehension) and a high incidence of scams (45% reported being scammed). This reinforces the regulators' cautious stance and the need for consumer education, which the CBE intends to continue providing.

It is also noteworthy that the CBE is actively researching and developing a potential Central Bank Digital Currency (CBDC), the "Digital Lilangeni." This is a separate initiative from the regulation of private cryptocurrencies like Bitcoin, aiming to provide a digital form of central bank money.

In summary, Eswatini permits retail cryptocurrency trading by default (i.e., through a lack of prohibition) but does not regulate the activity specifically. Authorities are aware, are conducting research, and have formed a task force to develop policy, but currently, the market operates without specific rules, oversight, or protections, placing all risks on the participants.

**3. Relevant Text Excerpts:**

*   **On Lack of Specific Regulation:**
    *   "Currently, there is no cryptocurrency legislation or regulation in Eswatini." (Source: Eswatini Baseline Cryptocurrency Survey, via Google Search Snippet [3])
    *   "In his country [Eswatini], cryptocurrencies are not classified as legal tender, and cryptocurrencies are not specifically regulated." (Source: Freeman Law, [4])
    *   "Currently, there is no cryptocurrency policy or regulation in Eswatini. This means there is no law that recognizes cryptocurrencies as money and there are no laws governing crypto-related activities." (Source: UPay Blog, [5])
    *   "Crypto investments or assets are currently unregulated in Eswatini; therefore, investors do not benefit from the legal protection associated with regulated instruments or products." (Source: Central Bank of Eswatini, [6])
    *   "May I emphasise that virtual service providers are currently unregulated in the country and therefore no virtual asset service providers have been authorized to offer financial services." (Source: Governor Phil Mnisi, CBE Annual Monetary Policy Statement Address, June 2024, [10])

*   **On Lack of Legal Tender Status:**
    *   "Cryptocurrencies are not legal tender in Eswatini." (Source: Central Bank of Eswatini, [6])
    *   "They [Cryptocurrencies] do not exist physically and have no legal tender status in Eswatini." (Source: Central Bank of Eswatini, [6])

*   **On Warnings and Lack of Protection:**
    *   "...there is no protection or legal recourse available from any institution including the Central Bank in the event that the user suffers financial loss from the use of Bitcoin or any other cryptocurrency.” (Source: Baker McKenzie, citing CBE statement from 2017, [2])
    *   "Despite the government's optimism towards cryptocurrencies, the CBE issued warnings that cryptocurrencies are virtually unregulated. Consequently, there is a risk that investors will be left with no method of recovering financial losses because 'there is no protection or legal recourse available from any institution including the Central Bank.'" (Source: Freeman Law, [4])
    *   "The Central Bank of Eswatini (CBE) has previously issued a public warning through the media, stating that individuals who wish to engage in digital currency trading must assume the associated risks." (Source: Eswatini Baseline Cryptocurrency Survey, via Google Search Snippet [3])

*   **On Ongoing Research and Policy Development:**
    *   "The [Central] Bank is working collaboratively with the Ministry of Finance and other relevant stakeholders to develop a national policy position on cryptocurrencies." (Source: Governor Phil Mnisi, CBE Annual Monetary Policy Statement Address, June 2024, [10])
    *   "The bank [CBE] has revealed... that it is furthering its research on cryptocurrencies by collaborating with the Financial Services Regulatory Authority (FSRA) to form a Crypto Assets Task Force (CATF)." (Source: Inside Biz, [7])
    *   "The Governor disclosed that the CATF aims to produce a national policy recommendations paper that will provide comprehensive guidelines on how to regulate cryptocurrencies, establishing a secure and stable environment for investors and consumers." (Source: Inside Biz, [7])

**4. Source URLs:**

*   **Central Bank of Eswatini (CBE) - Considerations For Dealing In Cryptocurrencies (March 2023):**
    *   `https://www.centralbank.org.sz/wp-content/uploads/2023/03/Considerations-for-dealing-in-Cryptocurrencies-Final-Draft.pdf` (Link derived from search result [6])
*   **Central Bank of Eswatini (CBE) - Governor's Annual Monetary Policy Statement Address (June 2024):**
    *   `https://www.bis.org/review/r240814g.htm` (Source [10])
*   **Freeman Law - Swaziland and Cryptocurrency:**
    *   `https://freemanlaw.com/swaziland-cryptocurrency-laws/` (Source [4])
*   **Inside Biz - Central Bank & FSRA Collaborate To Form Crypto Assets Task Force (May 2023):**
    *   `https://insidebiz.co.sz/2023/05/23/central-bank-fsra-collaborate-to-form-crypto-assets-task-force/` (Source [7])
*   **UPay Blog - Crypto Adoption Around the World: Eswatini (Swaziland) (November 2024 - *Note: Date likely refers to blog update, content reflects earlier status*):**
    *   `https://upay.co.ug/blog/crypto-adoption-around-the-world-eswatini-swaziland/` (Source [5])
*   **Eswatini Baseline Cryptocurrency Survey (ESEPARC/CBE - referenced in multiple sources, direct link to full report may require searching ESEPARC/CBE websites):**
    *   (No direct URL provided in snippets, but referenced heavily in [3] and [10]. A search on CBE or ESEPARC websites for "Baseline Cryptocurrency Survey" would be needed for the full document.)
    *   Reference in Governor's Statement [10]: `https://www.bis.org/review/r240814g.htm`
*   **Baker McKenzie - Blockchain and Cryptocurrency in Africa (Potentially dated reference to 2017 CBE statement):**
    *   `https://www.bakermckenzie.com/-/media/files/insight/publications/2018/08/report_blockchainandcryptocurrencyinafrica_aug2018.pdf` (Link derived from search result [2])

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**End of Report**