Blockchain and crypto-currencies have added millions of people around the world in an uproar, while the possession of trade and crypto inventories continue to rise.
In the same breath, many countries have taken on the world, a tough stance towards crypto-currencies. Some countries, such as China have banned its use, while others, such as Malta at the forefront of the crypto currency and the Blockchain-development.
In an African context, this sector is growing slowly. At the southern end of the continent, South Africa is in an interesting Position. As one of the major economic centres of Africa, has the potential to be a leader in terms of the Blockchain-development and adaptation of the crypto-currency.
It is worth thinking about how the current climate in this country looks like and what efforts are being made to Innovation and acceptance of this emerging new industry.
tax authority
The crypto currency trading gained in the last two years, tremendous popularity, as the second half of the year 2017 showed, as a Bitcoin and some Altcoins climbed to all-time highs.
During this time, brave investors flocked to the market in the hope to catch a spiral of the bull market, which brought many of the early investors to significant sums of money.
throughout the world, the crypto-currency markets were flooded with new users trying to open accounts and to get the increasingly valuable Bitcoins and the like in the Finger.
Some people made massive profits, while others saw the values of their investments, while the resulting correction fall. This did not change the fact that the tax authority wanted their share of those who collected their profits.
This was the case in South Africa where the South African tax authority (SARS) made to registered Taxable persons is clear that you have to pay taxes on profits from crypto-currencies.
How is crypto in South Africa
classified As the SARS, is not defined, the word “currency” in the income tax act. It is important for people to understand this, because it means that crypto-currencies are taxable.
“crypto – neither official South African a means of payment, yet they are widely used in South Africa as a means of payment or medium of exchange far and they are only accepted in a few Places, currencies. Therefore, crypto is not currencies are regarded by SARS as a currency for income tax purposes or capital gains tax. Instead, crypto-currencies of SARS will be considered as intangible assets.”
However, it can be the value of a given amount of crypto currency in South African Rand, rating, and any income that is generated from the crypto currency trading, can be taxed according to the laws of gross income.
in Short, South Africans to actively get involved with crypto-currency, taxes on your income figures.
‘t be afraid, it is legal
In a South African context, the use of crypto-currencies is legal. There are no laws for the sector, although the South African Central Bank (SARB) supervises the Situation.
The Central Bank released the 2014 White Paper in which they outlined their views on crypto-currencies openly. The Institution does not recognize the cryptocurrency as a legal tender.
In South Africa. the Central Bank has the sole right to the money in the Form of banknotes and coins and to manage Therefore, crypto is not falling currencies in the area of competence of the Central Bank.
Simply put, does not consider the Central Bank crypto-currencies as an Alternative to Fiat currency, they regarded it at all as a legitimate currency. In this document , the SARB said that crypto-currencies pose no threat to the South African Rand or financial institutions:
“in view of the current landscape and the currently available information, the Bank claims that venture capital investments do not pose a significant risk to financial stability, price stability or the national payment system.”
the task force keeps an eye on crypto
Since the first of the SARB report on crypto-currencies is almost 5 years old, has established the Institute since then, a FinTech-group, which will deal with cryptocurrencies and Fintech developments in the country.
How to invest it was in the world of the case, was the protection of investors, a large Problem in view of the inherent risk in crypto-currencies and Initial Coin Offerings (ICOs).
This is a self-regulatory body will be given the opportunity to set their own rules and guidelines, while at the same time trying to agree on the development of crypto and Blockchain in the country with a risk prevention.
In the first announcement in April of 2018, Bridget King, Director of Bank supervision of the SARB, said that a big hurdle with the time limits and the danger associated regulation, which could curb the growth of the sector:
“Early regulation of crypto-currencies could have a negative consequence to slow the growth and Innovation in the industry. If laws are developed on the basis of the existing technology, which is still in the growth phase, there is also a risk that the technology was changing at the time of the adoption of the legislation so strong that the legislation is out of date or almost immediately need to be updated, to align it with the latest technology.”
In may 2018, provided the SARB is clear that Cryptocurrencies still not as money classified. The Deputy Governor of the Bank, Francois Groepe, explained the reasons for your classification and choice of the terminology:
“We don’t use the term “crypto-currency” because it reflects the requirements of money in the economic sense of a stable medium of exchange, a unit of measurement, and a stable unit of Value, equivalent. We prefer to use the word “Cyber-Token”.
This is a major reason for this is that the SARB has launched its Fintech-group. Groepe said the Bank wants to ensure that the crypto-currencies and their trade on South African laws hold:
“We want to make sure or determine if the relevant financial, Supervisory, or stock exchange control regulations are complied with.”
the Central Bank has been testing Pliot-the Blockchain-payment system project Khokha
in addition to the Setupdeletion of this regulatory body for the South African crypto industry, the SARB has also driven a Proof of Concept for Blockchain-based payment system.
Project Khokha has been tested and in June 2018, a report published. The System was created by using the Quorum platform of JPMorgan and offers participants the opportunity to use the Blockchain technology in a safe test environment.
according to The report, the daily volume of the South African payment system could be processed in less than two hours. In addition, transactions would remain completely confidential and will be completely done.
transactions have been processed within two seconds of a network of nodes in different locations, using distributed consensus. In addition, the SARB was able to get the details of the transactions, and regulatory oversight for their own purposes.
The project was mainly designed to show of the SARB and various participants first-Hand how the Blockchain technology for the rationalization of payment systems, can help.
Although no official Blockchain was introduced-based payment system from the Proof-of-Concept, but the Exercise has illustrated first-Hand the capabilities of the Distributed Ledger technology and the possible improvements to the current South African payment system:
“A goal of the Project Khokha is to provide a better understanding of how the SAMOS System (South African Multiple Option Settlement) in a DLT System could be integrated. It is not intended to change the approach to SAMOS, but to give the project a Input. “
patience game
regulation is a double-edged sword. It has the power to promote, both to and nourish, than to strangle her. When it comes to crypto-currencies, is the second scenario, a real Problem.
for this reason, in a South African context is a slow and methodical approach to crypto currency regulation is definitely positive. As King has previously suggested, could hinder the premature nature of the regulation of the development of the industry in the country.
If anything, should South Africans of the Fintech group of the SARB and the result of the report of the project of Khokha on the use of Blockchain-based payment systems will be encouraged.
Even if we will soon see, there is no clear legislation or regulation for the sector is the fact that the SARB is working together to explore the possibilities of Blockchain technology.
Cointelegraph has appealed to the opinion of the South African Central Bank and is waiting for an official response.
