A consultation paper is published by the South African Reserve Bank to manage cryptocurrency in the country. Nonetheless, the South African government seems to be integrating banking like framework to the crypto-markets; hence, conflicting with the core ethos of Bitcoin.
The bank calls cryptocurrency as “assets” over the previous concept, esteeming that the distinctions make it less demanding for regulators to implement tax policies and different protection and privacy laws managing the ownership of crypto/digital assets.
Released in a joint effort with the multiple monitory establishments in the country like; National Treasury, the Financial Sector Conduct Authority, and the Financial Intelligence Cente (FIC), the paper recognizes the criticalness of cryptocurrencies as a “vital fintech innovation.”
The new government system will wipe out scams and frauds. It will help ensure investors who are interested in crypto money, however, most importantly, it will make it simpler to follow transactions and impose taxes.
Apart from this released paper, the government is due to release another document in the first quarter of this year which will be dedicated to e-wallets and monetary services identified with cryptocurrencies. However, the move de-anonymizes digital money transactions in South Africa, taking Bitcoin closer to the conventional banking system which the government is hoping to close sometime in the future.
According to the report, the new laws would guarantee crypto exchanges and wallet suppliers that they would be able to track the transactions of the customers and would be in charge of their client’s use of digital currencies; just like the work banks play in the present monetary condition.
While justifying its firm stance when it comes to crypto related transactions, the paper brings out a few facts of the crypto sector. It says that price instability in the crypto market, market illiquidity, scams, and cybercrime attacks are the risks related to the digital currency.
Luckily, Bitcoin is still in investor’ good books. The paper states that crypto money is like any other financial product such as securities and bonds, and their trade will active in South African markets. But, the group wants to increase the monitoring of cryptocurrencies and hopes to manage the industry by preventing any unwanted incident.
Among the numerous strategies, startup crypto companies are expected to enlist with the government to operate the business. The government has framed a set of rules for service providers in the crypto market. Organizations which are involved in the purchasing and selling of cryptocurrencies, for example, exchanges, wallets will get affected by these rules.
The paper notes that this would lead to formal approval and acceptance as a listed /authorized supplier for crypto-assets services functioning the business in Sout Africa. Cryptocurrency providers will be subject to the Strict anti-money laundering laws (AML). Business and exchange are obliged to keep track of the transactions done in cash, which are above $1,824.