A South African bank is introducing new guidelines on how citizens can and should preserve cryptocurrency.
The South Africa Reserve Bank (SARB) says the new rules will apply in the early months of 2020 after a consultation process that has lasted almost five years. The country has been virtually lost in how cryptocurrencies should be regulated and controlled and since 2014 has been seeking advice and international guidance from experts in digital currency.
Some of the primary concerns of the organisation, according to Kuben Naidoo, the deputy governor of the bank, are preventing white collar crimes and stoping cryptocurrency fraud. Digital currencies, he says, can be used to circumvent currency controls, and the bank seeks to put an end to this threat. Therefore, limiting the amount of currency entering the country will be one of the new rules.
Bitcoin and any of its altcoin relatives would also be subject to this statute. If a very large amount of crypto is found by the bank to be passed to an outside wallet or party, an investigation is likely to follow.
Africa’s experience with cryptocurrencies has been largely mixed. Many smaller banks across the continent, such as the First National Bank (FNB), have already tried to limit the amount of cryptoactivity taking place. The company is one of the “big five” banks in South Africa and has already shut down all the accounts of its customers that could manage digital assets.
FNB says crypto entails too much risk, including its instability and its ties to criminal activity such as money laundering.
Simultaneously, many see Africa as a prime area to improve crypto trading and technology in blockchain. Previously, Jack Dorsey, CEO of Square and Twitter, revealed that he would switch from anywhere from three and six months after visiting several regions to an unspecified country in Africa. He goal is to establish the continent’s stronger crypto presence and potentially bring more crypto-trading to the citizens of Africa.
Nigeria, Ethiopia, Ghana and South Africa were among the countries visited by Dorsey. The new crypto regulations given to South Africa prove to be too powerful or restrictive for Dorsey, he may have to decide on one of the other three regions to bring his ambitions to life.
In a recent tweet, Dorsey announced: “Sad to be leaving the continent… for now. Africa will define the future (especially the bitcoin one!) Not sure where yet, but I’ll be living here for three to six months mid-2020.”
Moreover, several new blockchain and crypto startups have selected Africa as their home, including Bit Hub, founded by John Karanja four years ago. The company aims to promote the role of crypto in the country and that the shortcomings of Africa’s traditional finance.