The cryptocurrency industry has seen major advancements despite prices taking a dip in 2018. The advancements majorly revolved around increased acceptance of Altcoins which, consequently, led to an increased need for formal recognition of cryptocurrencies in economies across the world. The unique nature of digital currencies in comparison to fiat currency has slowed down the process of legislative regulations the world over. On January 2nd, South Africa hopped onto the push for a regulated space for cryptocurrency in her economy. This is because for any currency to be regarded as legal tender, it has to get some form of green light or backing from the state.
Cohesive and Comprehensive regulatory response
The drive, led by the Minister for Finance-Tito Mboweni, wants a cohesive as well as a comprehensive regulatory response to cryptocurrency in the country. In a letter dated January 2, the government announced that it had created a regulatory working group to steer the matter. The group comprises of thought leaders and representatives drawn from various South African agencies.
The letter from the minister was addressed to parliament. It implored parliament to come up with the substantive legislation from the ministerial directives in the letter. The directive included among others: The formation of a regulatory group towards government response to cryptocurrencies and the underlying technology. Also, parliament would have the working group’s detailed research on a unified cryptocurrency regulatory standard throughout South Africa.
Growing Digital assets economy
As with other regions around the world, the cryptocurrency industry in South Africa is growing rapidly every day. Multiple studies conducted last year indicate that 70% of South African consumers define cryptocurrency along the same lines as investments. The respondents also registered positive investor sentiments with regard to holding onto their cryptocurrency investments in the long run – despite price fluctuations.
2018 alone saw the industry grow by 25% in the country. In terms of market activity, Bitcoin traders Local Bitcoins saw its volumes swell. All these indicate a growing market that called for immediate regulation to ease trade in cryptocurrency and to also ensure that it is safe.
Informed by these developments, the South African Revenue Service (Sars), South African Reserve Bank, Treasury, Financial Sector Conduct Authority, and Financial Intelligence Centre came together under the umbrella of a cryptocurrency working group to better arrest the situation. CRYPTO IS COMING!