South African SARB To Impose Crypto Regulations In Q1 2020; Community Calls It ‘Alarming’
South Africa’s Reserve Bank (SARB) is on hand to introduce cryptocurrency regulations in a bid to carb the extensive use of the digital assets to evade currency controls.
This follows the ban from the largest bank in the country, FNB, on conducting crypto asset transactions for its customers. With the regulations set to be introduced in mid-2020, the largest cryptocurrency community sees the regulations as a stumbling block to the development of the industry.
SARB regulations set for mid-2020
According to local reports from the Business Report, the South African Reserve Bank is set to introduce crypto asset controls in the country in mid-2020, after almost six years in consultations and drafting of the law.
SARB’s deputy governor, Kuben Naidoo, speaking to journalists, stated the top bank in the country will be introducing these regulations in order to carb the extensive use of crypto assets in navigating currency controls
According to currency laws in the second largest economy in Africa, investors are allowed to transfer only 11 million Rand (1 million rand without permission and 10 million rand with special permission) to foreign states. Such tough laws have seen the wealth look for better options such as cryptocurrencies to navigate around the regulation.
A “regulation starved” industry in South Africa
The field of cryptocurrency has remained largely unregulated for the past decade – a move that has started to take effect on banks transacting digital assets.
On Nov. 21, the First Rand Bank (FNB), released a statement regarding shutting down any crypto related transactions given the lack of regulation in the country. The statement read,
“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.”
The ban on cryptocurrencies by FNB caused a number of crypto exchanges to look for other options within the country. Some of the top exchanges affected by the ban includes Luno, ICE3X, AltCoin Trader and VALR.