The central bank of South Africa is planning to bring in new cryptocurrency laws in 2020. The goal is to stop digital assets from being used to evade currency controls.
2 December 2019 | AtoZMarkets – The South African Reserve Bank (SARB), the country’s central bank, is planning to introduce new rules to stop cryptocurrencies from being used to evade currency controls.
The new rules are expected to be put in place in 2020
SARB deputy governor Kuben Naidoo has reportedly said that the new cryptocurrency laws would be put in place in Q1 2020. With these rules, the central bank would restrict how much local currency (rand) can be sent outside South Africa.
Presently, South Africans can send only 1 million rands (around $68,200) across the border without a declaration. However, for foreign investment purposes, citizens can send 10 million rand (~$682,285) with special application to the South African Revenue Service.
This leaves cryptocurrency as the most popular method of sending money anywhere in the world, but the central bank’s plan to put restrictions is “far-reaching and alarming,” said SA Crypto, South Africa’s blockchain community, adding:
“Conservative regulations would not only hinder innovation in South Africa but repel investment into the country.”
Will South Africa be the next big cryptocurrency destination?
SARB’s plan to bring in new rules comes at a time when Africa has seen increased cryptocurrency interest. Just last month, Jack Dorsey, CEO of Twitter has set his sights on Africa. As AtoZMarkets reported, the CEO recently said that the continent will
“define the future (especially the bitcoin one!). Not sure where yet, but I’ll be living here for 3-6 months mid-2020.”
According to a survey, there are around 1.25 million South Africans that possess cryptocurrencies. This, however, does not show how many of them are active traders. But seeing at the development overall, it does indicate that most of these people are HODLers. Should the crypto market show any signs of an upcoming bull run, South Africans would be able to contribute millions of dollars to the daily trading volume, with other African countries following suit.
It is important to note that South Africans are not the only ones heavily invested in cryptocurrencies. Nigeria and Ghana are well behind SA in terms of crypto trading. Therefore the continent of Africa is shaping to be one of the best crypto hubs for the future, the only thing required is to convince crypto companies to integrate into the region.
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