BY MBONO MDLULI
MBABANE – As global conversations around Bitcoin adoption and digital assets continue to gain momentum, Minister of Finance Neal Rijkenberg has offered a measured and thoughtful perspective, emphasising caution, financial stability and national responsibility in Eswatini’s approach to emerging financial technologies.
Speaking on Wednesday, January 7, 2025, during a meet-and-greet session with staff members of Eswatini Positive News (EPN), Minister Rijkenberg shared both the Government’s position and his personal views on Bitcoin. His remarks come at a time when several countries are openly discussing or actively pursuing the accumulation of Bitcoin as part of their national reserves.
The Minister began by explaining the fundamental differences between Bitcoin and conventional national currencies such as the lilangeni. Unlike Bitcoin, the lilangeni is backed by a sovereign state and anchored within a regulated financial system. It can be exchanged for goods and services locally and converted into assets such as gold or foreign exchange through the Central Bank of Eswatini (CBE).
“Emalangeni are supported by the country,” Rijkenberg explained. “They allow citizens to transact daily, buy necessities, and access foreign currency through established and regulated systems.”
In contrast, the Minister described Bitcoin as a digital asset whose value is largely driven by market perception rather than institutional or sovereign backing. While acknowledging Bitcoin’s remarkable growth and performance over the years, he cautioned that its price volatility presents significant risks.
“There is no denying that Bitcoin has performed phenomenally,” he said. “If you buy at the right time, the returns can be impressive. But if you enter at the wrong moment, the losses can be severe.”
From a governance perspective, Rijkenberg emphasised that such volatility makes Bitcoin unsuitable as a primary store of value or national reserve asset. He noted that individuals and governments planning for long-term financial security require stability, predictability and accountability.
“For someone with clear financial goals, Bitcoin can be risky,” he said. “It is an asset that can fluctuate dramatically, and in the absence of backing, it could theoretically lose value overnight.”
Another area of concern raised by the Minister relates to the misuse of Bitcoin in illicit financial activities. He highlighted that cryptocurrencies, particularly those with high levels of anonymity, are often associated with scams, money laundering and other financial crimes.
“Those involved in financial crimes frequently prefer to be paid in Bitcoin,” he said, adding that this anonymity complicates law enforcement efforts. “It becomes more difficult to trace transactions, which poses challenges for international finance, counter-terrorism and anti-money-laundering initiatives.”
Rijkenberg stressed that global efforts to combat terrorism have been most effective when governments focus on cutting off financial flows. In his view, widespread acceptance of untraceable digital currencies could undermine these gains.
“One of the strongest tools against terrorism is stopping its funding,” he said. “That is why the role of finance ministries worldwide has been so critical in reducing terrorist activities.”
Despite his reservations, the Minister made it clear that he is not opposed to innovation in the digital finance space. He acknowledged that certain cryptocurrencies with clear governance structures, identifiable ownership and regulatory oversight could have a role in the future financial ecosystem.
“I believe there is space for digital currencies that are backed, regulated and transparent,” he said. “However, Bitcoin, in its current form, does not meet those criteria.”
He also clarified that he does not personally own Bitcoin and has never invested in it, reinforcing his position of caution rather than speculation.
Addressing examples of countries that have adopted Bitcoin, Rijkenberg noted that many of them faced serious economic challenges prior to adoption. Some had weak currencies, limited access to foreign exchange, or were already relying heavily on the US dollar.
“In Eswatini, we are fortunate to have a healthy financial system,” he said. “Our currency is stable, and it is relatively easy to convert emalangeni into stronger currencies such as the US dollar.”
In contrast, he explained that businesses in some countries struggle to access foreign exchange, sometimes waiting months to obtain approval. This forces companies to keep funds offshore in order to continue trading internationally.
The Minister further highlighted the importance of monetary sovereignty. He cautioned that adopting Bitcoin could limit a country’s ability to manage its money supply, especially in response to population growth and economic needs.
“As a population grows, a country needs flexibility in its monetary policy,” he said. “With Bitcoin, that ability is lost, and effectively, someone else is controlling your money supply.”
In conclusion, Minister Rijkenberg reaffirmed Eswatini’s commitment to a prudent, well-regulated financial system that prioritises stability, security and inclusive growth. While recognising the global interest in Bitcoin, he made it clear that Eswatini will continue to assess emerging technologies carefully, ensuring that any future decisions align with national interests and long-term economic resilience.
Below is a list of the main arguments for and against the adoption of Bitcoin, suitable for policy discussions, media analysis, or public education. The tone is neutral and analytical.
Arguments For the Adoption of Bitcoin (mainly by international investors, bankers, academics and financiers)
- Financial Sovereignty and Independence
Bitcoin allows countries, institutions and individuals to reduce dependence on dominant global currencies such as the US dollar. For nations facing sanctions, restricted access to global banking systems, or foreign exchange shortages, Bitcoin can provide an alternative settlement and reserve option.
- Hedge Against Inflation
Bitcoin has a fixed supply of 21 million coins, which appeals to countries and individuals concerned about inflation caused by excessive money printing. In theory, this scarcity can protect value over the long term compared to fiat currencies that can be expanded.
- Borderless and Fast Transactions
Bitcoin enables near-instant cross-border transfers without relying on correspondent banks. This can reduce transaction costs, settlement delays and reliance on international financial intermediaries.
- Financial Inclusion
In countries with large unbanked populations, Bitcoin can provide access to financial services through mobile phones, bypassing traditional banking infrastructure. This may improve participation in the digital economy.
- Transparency and Auditability
Bitcoin operates on a public blockchain, meaning transactions can be verified and audited. While identities may be pseudonymous, the system itself is transparent, which can enhance trust if properly regulated.
- Strategic Reserve Asset Potential
Some governments view Bitcoin as “digital gold” and a potential long-term reserve asset. Holding Bitcoin may diversify national reserves and reduce exposure to single-currency risks.
- Protection Against Asset Seizure
Bitcoin holdings cannot easily be confiscated or frozen by foreign governments or institutions, offering protection in politically unstable or hostile environments.
- Innovation and Economic Signalling
Adopting Bitcoin can position a country as technologically forward-looking, attracting fintech innovation, investment and talent into the digital economy.
Arguments Against the Adoption of Bitcoin (mainly by international investors, bankers, academics and financiers)
- Extreme Price Volatility
Bitcoin’s value fluctuates significantly, making it unreliable as a store of value, medium of exchange, or reserve asset for governments that require stability and predictability.
- Lack of Intrinsic or Sovereign Backing
Bitcoin is not backed by a government, central bank, or physical assets. Its value depends largely on market perception, which raises concerns for risk-averse public institutions.
- Financial Crime and Illicit Use
Bitcoin has been linked to money laundering, fraud, ransomware, and terrorism financing due to its pseudonymous nature. This poses challenges for law enforcement and financial regulators.
- Loss of Monetary Policy Control
Countries adopting Bitcoin risk losing control over key monetary tools such as money supply management, interest rates and inflation control, weakening economic sovereignty.
- Regulatory and Legal Challenges
Bitcoin adoption requires complex regulatory frameworks for taxation, consumer protection, anti-money laundering (AML) and counter-terrorism financing (CTF). Many countries lack the capacity to enforce these effectively.
- Cybersecurity and Custody Risks
Bitcoin holdings can be lost through hacking, poor key management or technical errors. Unlike traditional banking systems, there is often no recourse or insurance for lost funds.
- Limited Scalability
Bitcoin networks can be slow and costly during periods of high demand. This limits its effectiveness as a national payment system for large volumes of transactions.
- Environmental Concerns
Bitcoin mining consumes significant amounts of energy. Countries with limited or carbon-intensive energy supplies may face environmental and sustainability challenges.
- Reputational and Financial System Risks
Premature or poorly managed adoption may undermine confidence in a country’s financial system, affect credit ratings, and deter international investors.
Balanced Conclusion
Bitcoin presents clear opportunities for financial innovation, diversification and resilience, particularly for countries facing economic constraints or external pressures. However, it also carries significant risks related to volatility, governance, financial crime and loss of monetary control.
For most countries, the key policy question is not whether Bitcoin should be embraced or rejected outright, but how cautiously and strategically it should be engaged with, alongside strong regulation, education and institutional capacity.
Governments Holding Bitcoin: A Growing Global Trend
Several countries around the world now hold significant amounts of Bitcoin in their government reserves, largely as a result of law enforcement seizures, strategic investments, or policy decisions. While Bitcoin was originally designed as a decentralised asset outside state control, it has increasingly found its way into national balance sheets, according to sources such as Binance, WION, Webopedia, and Bitbo.
The United States currently holds the largest known government Bitcoin reserve, estimated at around 198 000 BTC. Most of these holdings were acquired through law enforcement seizures linked to criminal investigations, including high-profile cybercrime and fraud cases. Rather than immediately liquidating the assets, US authorities have opted to retain large portions under government custody.
China follows closely with an estimated 190 000 BTC, also primarily obtained through confiscations from illicit activities. Although China maintains a strict stance against cryptocurrency trading and mining domestically, it nonetheless holds substantial Bitcoin reserves as seized state assets.
The United Kingdom is another major holder, with approximately 61 000 BTC in government possession. These holdings stem mainly from police and National Crime Agency seizures during financial crime investigations.
Germany has also emerged as a notable holder, with around 49 000 BTC, again largely acquired through law enforcement operations. German authorities have periodically liquidated portions of these assets, demonstrating a more active management approach.
Ukraine holds an estimated 46 351 BTC, accumulated through a combination of confiscations and international donations, particularly following the outbreak of war. Bitcoin donations played a visible role in supporting humanitarian and defence-related efforts.
Among smaller nations, Bhutan stands out with approximately 13 000 BTC, acquired primarily through state-backed Bitcoin mining initiatives powered by the country’s renewable energy resources. This reflects a more strategic and investment-driven approach.
El Salvador remains unique on the global stage as the first country to adopt Bitcoin as legal tender. It currently holds around 6 000 BTC as part of its national reserves, positioning Bitcoin as both a strategic asset and a tool for financial inclusion.
Key Observations
- Primary Sources: Most government Bitcoin holdings originate from law enforcement seizures rather than deliberate monetary policy.
- Policy Diversity: While some countries hold Bitcoin passively, others actively trade, mine or integrate it into national systems.
- Strategic Experimentation: Bitcoin is increasingly viewed as a potential hedge, innovation tool or reserve asset, albeit with caution.
As global interest in digital assets continues to evolve, government Bitcoin holdings highlight a complex balance between regulation, innovation and financial sovereignty.
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Courtesy Pic)
