MAPUTO, The Bank of Mozambique has issued a warning that it will take no responsibility for any transactions in the virtual currency known as Bitcoin.

A statement from the country’s central bank Tuesday notes that Bitcoin is circulating in Mozambique and that it is becoming popular because of its ease in allowing the transaction of large sums of money for the acquisition of goods and services, for the transfer of funds, and for investment or payments.

Nonetheless, Bitcoin is fraught with danger and the central bank warns of great risks since, due to its very nature, this currency can be linked to criminal activities such as money laundering, financing terrorism and drug trafficking.

The statement stresses that the Bank of Mozambique does not regulate, inspect or supervise any activities and transactions made through Bitcoins, and cannot be held responsible for anything resulting from these transactions.

There is no legal framework for the use of Bitcoins in Mozambique, and companies dealing in Bitcoins are not regulated or supervised by the central bank. This virtual currency, the Bank says, offers no security, and is vulnerable to fraud and other crimes committed though the use of computers.

Bitcoins are also a highly volatile currency, and the fact that it allows anonymous transactions favours criminal activities, the central bank adds.

The central bank stresses that Bitcoin is not related to e-money which is generally accepted as a means of payment by people other than the issuer, and is converted into money on request. Unlike Bitcoin, e-money is envisaged in the legislation of several countries, including Mozambique, as an authorised activity of financial institutions.

The statement concludes with a pledge by the central bank to support financial innovations, including those based on new technologies, which make the financial system more secure and efficient.