The central bank of South Africa, SARB has allegedly announced its intentions to set up new regulations to prevent any currency control invasions by users of digital currencies.
According to reports on December 2 from Business Report, a local publication with a focus on business, Kuben Naidoo, the Deputy Governor of SARB revealed that the first three months of 2020 would see the implementation of the new rules which will come after five years of multiple consultations.
FirstRand Bank, one of South Africa’s top financial institutions, had also announced its decision to stop offering banking services to crypto currency exchanges come late November. According to purported reports about FNB’s view on the issue, regulatory uncertainty is to blame for the move.
Based on a what the blockchain development community of South African SA Crypto revealed to Business Report, this idea of controlling crptocurrency more extensively has already been responded to by the blockchain and crypto communities. It said the impact of the clamp down on the use of cryptocurrency by SARB for stringent capital controls is quite high and and alarming.”
The popularity of Crypto in South Africa and Crypto Regulation
In South Africa, the popularity of cryptocurrencies is the highest, and about 10.7% of residents own crypto, making the country the highest of all countries surveyed on crypto ownership. South African currency, the Rand, is among the crypto industry’s most volatile. That is what instigated consumers to look for a means to safeguard their money via digital currencies.
What surges the popularity of cryptocurrency is its cross-border payment capability, especially considering the transfer of funds that are usually made to other countries around Africa with South Africa sending to fifteen Southern African Development Community (SADC) members.
Luno, a top South African exchange, made a daily trading volume averaging more than 80 million South African rands (about $5.4 million). New customer surge saw a significant increase on the Luno exchange, reaching a groundbreaking three million wallets from 40 countries with users on the platform.
According to Marius Reitz, Luno’s General Manager for Africa, this is an indication of a rise in global adoption as well as reinforcement company’s driving towards “reimagining a financial system” that offers cheaper, faster, safer and equal money access for everybody.
BRICS’s crypto and the united payment system
In a summit held recently in mid-November, BRICS members; South Africa included reflected on creating a new cryptocurrency. The Russian Direct Investment Fund Director-General, Kirill Dmitriev commented during the discussion, “A competently functioning BRICS payment system can stimulate settlements in national currencies…” to ensure that there are settlement and investment stability between these countries that make above 20% influx of foreign direct investment globally.
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