South African Reserve Bank seeks to introduce crypto-friendly policies

The deputy governor of the South Africa Reserve Bank (SARB) confirmed that the country is moving toward crypto adoption to make the use of cryptocurrencies in mainstream sector.

South Africa is a country on the southernmost tip of the African continent. The past stances of the South African government showed that the country is comfortable with the circulation of crypto assets in the country. Tax systems for crypto investors are similar to traditional tax systems but applicable to capital gains on crypto investment.

On 12 July, During the speaking at a webinar, Kuben Naidoo, the deputy governor at South Africa Reserve Bank (SARB), said that the country’s government is ready to introduce a precise crypto regulatory framework, which includes provisions to support crypto innovations in the country. 

Mr Naidoo said that new law may get introduced within the next 18 months and the new law will not treat cryptocurrencies as a payment option but will treat it as a financial asset so that cryptocurrencies can be utilized in the mainstream sector. 

“We are not intent on regulating it as a currency as you can’t walk into a shop and use it to buy something. Instead, our view has changed to regulating (cryptocurrencies) as financial assets. There is a need to regulate it and bring it into the mainstream,” the deputy governor said.

The deputy governor indirectly emphasized the need to prohibit the hype nature of crypto projects, which are usual strategies to promote crypto tokens. He said that there should be better rules to balance the hype and with the investor protection that needs to be there. 

The statements passed by the Deputy governor during the webinar confirmed that there will be room for the use of crypto in payment systems but crypto will not be treated as legal tender. 

Naidoo also noted that there are some genuine tech innovations by particular crypto projects that can be further improved and can be introduced into the payment system. 

Read also: US Treasury seeks to get public opinion on crypto