Future Crypto News | Latest Country Updates for Crypto Currency

South Africa

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General adoption

In last June (17, 2021) South Africa has officially embraced cryptocurrency trade and investment laws, with its financial and capital markets regulators predicting an increase of crypto activity in the country. Merchants and individuals may choose to accept ‘payment’ offered in crypto assets of their own free will, with the understanding and acceptance of the risk that they will not have regulatory recourse from a payment perspective should something go wrong.

Government View

The South African policy position on crypto assets is neither explicitly ‘hostile’ nor explicitly ‘friendly’: through the IFWG CAR WG position paper, the South African financial sector regulators aim to remain neutral with the objective of enabling responsible innovation in the crypto asset ecosystem, while ensuring a level playing field between both incumbent and new role players.

Blockchain Projects

There are several blockchain projects in South Africa, among them are The Sun Exchange, VALR, Centbee, Custos Media Technology and Wala.

Taxes and Regulation

Application of financial sector laws: The working group recommended crypto assets defined as financial products. This required CASPs to become licensed intermediaries, thereby facilitating regulatory oversight and reducing the risk of unscrupulous entities taking advantage of investors. Crypto mining is legal in South Africa (note 16). In South Africa cryptocurrency is viewed as an assets of an intangible nature” as opposed to currency or property. Crypto thus attracts both Capital Gains Tax and Income Tax. It is unfortunately not clear whether crypto should be taxed as income or as capital.

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Privacy

Framework for monitoring cross-border financial flows: The Financial Surveillance Department (FinSurv) of SARB was recommended to supervise and regulate cross-border flow of crypto assets. It was also recommended to amend certain parts of the exchange control regulations to allow crypto asset trading platforms (CATPs) to source or buy crypto assets offshore for the purpose of selling to the local market, subject to specified limits to be determined by Finsurv. All jurisdictions are required to regulate crypto assets and crypto asset service providers (referred to as ‘virtual assets’ and ‘virtual asset service providers’ by the FATF) for anti-money laundering and combating the financing of terrorism.

Last Updated

Tuesday, 1 November, 2022