Consultation paper for regulation of cryptocurrency in the region produced the South African reserve Bank. However, the government seems to be introducing the banking functions for the cryptocurrency, going against the concept of bitcoin.
The Bank prefers the term – scriptactive, not cryptocurrency, believing that this will make it easier for authorities understanding and implementation of tax policies and various laws on the protection for the possession of the digital currency.
The document was developed in collaboration with the National Treasury, the revenue Service (SARS), the Administration of the financial sector (FSCA) and the financial intelligence Centre (FIC), and it notes the importance of cryptocurrency as “an important financial technological innovation.”
This framework is designed to eliminate fraud and protect investors who are interested in cryptocurrencies, but, importantly, it facilitates the monitoring of operations and revenue collection. In addition, in the first quarter of 2019 will be released analytical document on e-wallets and financial services related to cryptocurrencies.
But this document deanonymize cryptocurrency transactions in South Africa, bringing bitcoin to the traditional banking system, despite the fact that it was created in order to eradicate the banking system. According to Internet sources, the new laws will ensure that providers of stock exchanges and wallets will keep track of their transactions and be responsible for the use of crypto-currencies to their customers, similar to the role that banks play in the financial environment today.
Explanation for its tough stance on the management of the sector of cryptocurrency, the document calls price volatility, market illiquidity, large-scale fraud and cybercrime related to the cryptocurrency market.
The document mentions that crypto-currencies are similar to financial products such as securities and bonds, and they trade will remain active in the markets of South Africa. However, the working group seeks to improve the monitoring of cryptocurrency and seeks to regulate the sector to prevent any unpleasant incidents.
Among the many rules it is expected that cryptocurrency startups will be recorded in the government for business, with a set of rules for service providers in the cryptocurrency market. Enterprises associated with buying and selling cryptocurrencies such as exchanges, wallets and suppliers of appropriate software will have to register.
The document says:
This can lead to the emergence of formal permissions and definitions registered/licensed providers scriptaction working in South Africa.
To providers of cryptocurrency will apply strict laws to combat money-laundering (AML), including collecting sensitive information such as physical address and national identity card, as banks do. In addition, the company will monitor and report “suspicious transactions” for amounts above 25 000 Rand, which is approximately $1824 and above.