Cryptocurrency regulatory working group to be set up by South African government

The South African government has recently announced that they will be taking a more concrete and decisive approach to the concept of cryptocurrencies such as Bitcoin Cash [BCH] and Ethereum [ETH], according to a letter by Tito Mboweni, the Minister of Finance of South Africa.

The official also stated that the government was establishing a “cryptocurrency asset regulatory working group” that will focus on investigating and researching all aspects of digital assets as well as blockchain technology. The minister further detailed on the members involved in the task force, a roster that includes the Treasury, the Reserve Bank, Financial Intelligence Centre, the Financial Sector Conduct Authority and the SA Revenue Service [Sars]. Mboweni had said:

“It is anticipated that, following broad industry comment and participation, the crypto assets regulatory working group will be ready to release a final research paper on the subject during the course of 2019.”

The Financial official added that the revenue bodies were not able to monitor the profits and losses generated by cryptocurrency transactions because of the loopholes prevalent in the existing financial framework. In his words:

“However, work is underway within Sars to consider the amendment of the tax forms for the 2019 tax season in order to cater for the description of other assets (which will include cryptocurrencies) by means of a specific description field on the form.”

The South African finance minister went on to say that taxpayers have claimed that cryptocurrency transactions come under the ambit of ‘other trade income’ or ‘other trade loss’. This included cited examples of transactions involving Bitcoin Cash [BCH], Litecoin [LTC], Ethereum [ETH] and Zcash [ZEC].

This concept of cryptocurrencies is not new to the African country as just a few months back, South Africa witnessed the ICO launch of SAFCOIN, a proposed stepping stone for African citizens to learn about digital assets as a whole. During the launch, Neil Ferreira, the CEO, and co-founder of SAFCOIN, had said:

“Blockchain cryptocurrency is a confusing and unfamiliar concept to many Africans, which is preventing widespread adoption. With SAFCOIN, we hope to educate more people about the benefits of cryptocurrency and help them understand how and where to trade, so that they can be part of the global digital currency revolution and Africa’s cryptocurrency history.”

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