South African Reserve Bank to Strictly Regulate Cryptocurrency in 2020By Dec 03, 2019 2 Min Read
The South African Reserve Bank (SARB) is planning on introducing new regulations on cryptocurrency, which according to Kuben Naidoo, SARB deputy governor, will be fully implemented and enforced in the first quarter of 2020. The purpose of the new regulations noted in the report is to stop the citizens from using digital currency to evade sanctions or controls.
The coming regulations are regarded as a framework for how local currency should be exchanged and sent outside the country via cryptocurrencies and will be enforced by the SARB.
Concerns are being raised by the South African blockchain development community, SA Crypto. A representative said, "The implications of the SARB clamping down on cryptocurrency use for the purpose of stricter capital controls are far-reaching and alarming."
Concerning the planned regulations, the local bank FirstRand Bank (FNB), has already closed all the crypto services it offers to citizens, stating that:
"FNB considers this to be a prudent course of action following a comprehensive review of the potential risks currently associated with these entities, particularly given that appropriate regulatory frameworks are not yet in place."
AltCoinTrader, one of South Africa’s largest cryptocurrency exchanges, showed how disappointed they were with FNB’s decision to quit providing services for cryptocurrencies merchants. AltCoinTrader has been with FNB since 2015.
Richard de Sousa, AltCoinTrader chief executive, issued a statement where he showed his displeasure towards FNB's decision to discontinue its crypto services.
"We are disappointed that a financial institution would succumb to international pressure like this, with banking services being denied to individuals and industry players around the globe," he said.
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