Why South Africa wants to regulate cryptocurrencies

Why South Africa wants to regulate cryptocurrencies
Published: 03 May 2019 (4060 Views)
South Africa as a financial market participant has been on the rise in the last decade or so. Their prowess in financial knowledge, the growth of their economy, alongside the private equity indicator is proof that the quality of life is on its way towards improvement.

However, what shocked everybody in the world, was the survey conducted to find out which country has the most cryptocurrency literacy. Judging from the results, it's safe to say that in terms of literacy South Africa may not be #1, but is definitely the country with the largest possession of cryptocurrencies among its internet users.

Such a revelation had a massive impact on how the local government looks at cryptocurrencies as a whole. Thanks to technology's feature of being anonymous, it was very hard to determine the exact scale of the industry inside SA. The size of this market brings in, opportunity as well as multiple problems for the local government.

Loss of control over SA's gambling market
The South African government devotes quite a lot of attention to their local gambling market. Ever since the 1996 Gambling Act, the country has been doing relatively fine in terms of keeping the industry under control. This was all thanks to the payment methods that could be tracked, and the mandatory license that online operators had to apply for. But now, seeing how cryptocurrencies are slowly starting to dominate the online gambling market, SA's government is fearful of the loss of control over their local market.

According to experts from play.casino, foreign gambling operators have the capability of catering to SA's gambling population without having to apply for a license. In fact, they don't even have to market it as a SA exclusive platform, all they need to do is provide a cryptocurrency payment platform. The players themselves would be able to access it without any issues and make transfers without the government or anyone else ever finding out.

This loss of local capital, customer base and the missed revenue from licenses and taxing is definitely not beneficial for SA, however, the potential massive influx of crypto companies within the country prevents them from introducing a crippling regulation.

Potential for additional tax income
There is no government in this world that would refuse a new source of income, and South Africa is not an exception. Currently, their regulatory framework does allow them to collect taxes from the companies located within the country, but the collection of taxes on profits from crypto trading still remains to be quite hard.

If the regulations are tightened and the companies are forced to disclose information about their customers' trading activities, it is pretty much guaranteed that the volume will go down. There are dozens of crypto exchanges that operate internationally and don't need to conform to such rules unless directly confronted by local authorities.

An introduction of stricter regulations is going to hit the SA crypto market in its core, in its potential. Most of the companies that are considering to move their base of operations there would simply opt out due to changing conditions. And the traded volume with local operators would decrease as well. In conclusion, the SA government would be shooting itself in the foot.

- Byo24News

 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Europe sends a strong message to Mnangagwa

by Mandla Ndlovu | 20 August 2019 | 83 Views

Jonathan Moyo, Kirsty Coventry mourn Mnangagwa's 'love-rival'

by Mandla Ndlovu | 20 August 2019 | 76 Views

Our 'scoop' obsessed jurnos, first things first

by Tondorindo Murisa. | 20 August 2019 | 48 Views

A Letter to Zimbabwe National Army Officers

by Poverty-Stricken Zimbabwean | 20 August 2019 | 71 Views

Chamisa's hired soldiers caught with their pants down

by Dr Masimba Mavaza | 20 August 2019 | 76 Views

European Union shocks Mnangagwa's government

by Mandla Ndlovu | 20 August 2019 | 66 Views

Rebecca Malope retires

by Mandla Ndlovu | 20 August 2019 | 110 Views

The Crocodile in Crisis

by The Times | 20 August 2019 | 136 Views

'Zimbabwe to issue cash notes soon'

by Bloomberg | 20 August 2019 | 184 Views

Zimbabwe youths rally behind Chief Ndiweni

by Mandla Ndlovu | 20 August 2019 | 138 Views

Zimbabwean woman forced to give birth standing up in South Africa

by Staff reporter | 20 August 2019 | 146 Views

Open letter to Jacob Mudenda: What was your role during Gukurahundi?

by Nicholas Ncube | 20 August 2019 | 102 Views

Moral authority is a pre-requisite for Good Governance

by Big Monday with Tinashe Eric Muzamhindo writes: | 20 August 2019 | 78 Views

Zimdiaspora in final push

by Thabo Makuyana | 20 August 2019 | 92 Views

WATCH: Soldiers in Gweru march on behalf of Chamisa's MDC

by Staff reporter | 20 August 2019 | 177 Views

August 16 exposes the MDC's insincerity

by Nobleman Runyanga | 20 August 2019 | 80 Views

Mnangagwa 'love rival' dies

by Staff Reporter | 20 August 2019 | 135 Views

State effects a de facto ban on civilian politics

by Luke Tamborinyoka | 20 August 2019 | 85 Views

Chitembwe signs Harare City deal

by Staff reporter | 20 August 2019 | 80 Views

Zanu-PF congratulates Mnangagwa

by Staff reporter | 20 August 2019 | 82 Views

Govt hires 19 doctors

by Staff reporter | 20 August 2019 | 85 Views

Duo in trouble for assaulting ex-mayor

by Staff reporter | 20 August 2019 | 76 Views

Kambarami and Chigora found not guilty

by Staff reporter | 20 August 2019 | 84 Views

BREAKING: Bomb scare in Bulawayo

by Staff reporter | 20 August 2019 | 87 Views

Match fixing scandal rocks Zifa Southern Region

by Staff reporter | 20 August 2019 | 73 Views

Chunga not qualified to coach TelOne side

by Staff reporter | 20 August 2019 | 85 Views

Zanu-PF hails Sadc

by Staff reporter | 20 August 2019 | 70 Views

Teen gangster pleads guilty

by Staff reporter | 20 August 2019 | 65 Views

No pay, no invigilation: Zimsec told

by Staff reporter | 20 August 2019 | 61 Views

Chamisa raises ante against Mnangagwa

by Staff reporter | 20 August 2019 | 69 Views

Police ban MDC Gweru demonstrations

by Mandla Ndlovu | 20 August 2019 | 52 Views

Zanu-PF vows resistance against MDC 'regime change' plot

by newzimbabwe | 20 August 2019 | 48 Views

MDC's campaign for Chief Ndiweni release worrisome

by Editorial - Newsday | 20 August 2019 | 65 Views

Rural teachers chicken out

by Staff reporter | 20 August 2019 | 39 Views

Protests a form of feedback

by Zanda Shumba | 20 August 2019 | 39 Views