As per recently published reports, officials from the South African Reserve Bank have released a consultation paper in order to regulate the so-called “crypto assets”. According to this, all crypto-service providers will henceforth be required to register themselves with the government, which is taking these steps to enforce laws and taxes regarding consumer security, with more ease.The South African Reserve Bank (Sarb) is due to publish a policy paper that will be dealing with cryptocurrencies and digital assets in general, in the first quarter of 2019. They pointedly have refrained from using the term “cryptocurrencies” and have used the term, “crypto-assets” instead. This will enable the authorities to formulate regulations and laws that would be helpful in dealing with digital assets.
The need for a policy, as the paper states, is driven by the following problems:-
- Crypto assets are a form of innovation that may impact the financial sector of the country within the current regulatory framework.
- Crypto assets may create conditions for regulatory arbitrage while posing risks.
- There is growing interest, investment, and participation in crypto assets.
- Crypto assets do not fit neatly within the current regulatory framework.
The bank is hoping to de-anonymize Bitcoin transactions completely and wishes to see it as an alternative to the banking institutions in the country.
The paper reflects government’s tough stance on crypto transactions with regards to factors like price volatility, market illiquidity, widespread fraud, and cybercrime attacks, which have continuously been on the rise in crypto markets worldwide. The government is also trying to keep a strict eye on crypto firms registering themselves to trade in crypto assets, where crypto service providers will have to adhere to stringent anti-money laundering (AML) laws put in place by regulators.
The new rules and regulations as are being introduced are bound to influence businesses, trades, and transactions, to name a few, that are primarily dependent on cryptocurrencies.